He has many people to thank for making it happen — the engineers at his companies who achieved technological breakthroughs, the Wall Street investors who were willing to give them their dollars despite questionable financials, but most of all, American taxpayers and government policymakers.
The federal government awarded over $500 million in grants in its first few years alone.
“(Tesla and SpaceX) wouldn’t exist if it weren’t for the government,” Ross Gerber, chief executive of investment firm Gerber Kawasaki and one of Tesla’s early investors, told CNN.
The federal government gave SpaceX more than $500 million in grants in its early years. And that $500 million is just a fraction of the amount Tesla received from government grants, loans, contracts and regulatory policies.
That’s not to say that SpaceX’s success and Tesla’s roughly $1.5 trillion valuation are entirely due to federal spending, but both companies were on shaky ground as startups before they received taxpayer subsidies.
The initial funds gave SpaceX a boost
The question of whether Musk’s $1 trillion net worth comes from the government isn’t as simple as it sounds. According to some estimates, only a small portion of his wealth is owed to taxpayers. His companies have “alone” received tens of billions in government contracts and programs.
But it’s not just the amount of money that matters — it’s also when it was collected.
SpaceX’s first major funding was a $278 million grant from NASA in 2006 to develop the Falcon rocket system and Dragon space capsule. The Space Shuttle program was coming to an end and the US needed a new way to transport astronauts and cargo to the International Space Station.
It was the first of grants totaling more than $500 million that SpaceX would receive, according to data from PitchBook, which tracks private company valuations.
“That was about half of the capital they had raised up to that point,” Casey Dreyer, head of space policy at the Planetary Society, a public interest group that supports spaceflight, said before SpaceX’s IPO. “This is an important commitment that NASA has made.”
And while NASA has enjoyed the benefits of SpaceX’s success, with dozens of people being carried to the space station on the company’s rockets, it hasn’t benefited as much as private investors.
“The people who invested the other half of the capital at that time are going to be multi-billionaires,” Dreyer said.
And support from NASA didn’t stop at grants. Musk has admitted that the company was almost out of cash in late 2008, when it received a critical, and then unprecedented, $1.6 billion contract from the US space agency.
“The fact is, we could not have started SpaceX, nor could we have gotten to this point, without the help of NASA,” Musk said in 2012, during the first launch of the company’s Falcon 9 rocket to the International Space Station (ISS).
Regulations kept Tesla alive
By comparison, Tesla has received relatively limited government contracts in the past. However, it received significant help in its start-up — vital help.
As of January 2010, Tesla had sold fewer than 2,000 cars in its entire history, almost all of them eccentric electric models based on sports cars from Lotus, a relatively unknown British company. Tesla then received a low-interest loan of $465 million from the Department of Energy, months before its IPO. With the loan, the company developed the Tesla Model S sedan, its first major success. Tesla repaid the loan ahead of schedule, thanks to proceeds from an additional stock sale in 2013.
A $7,500 tax credit for electric car buyers allowed the company and other automakers to sell American-made electric cars at a higher price than the market would otherwise allow.
Tesla buyers received federal tax breaks worth a total of about $3.4 billion before the perk expired in 2019. Tesla then cut prices to keep up with demand. Given the size of the price cut, the tax break likely allowed Tesla to take in more than $1 billion from American car sales compared to what it would have collected without the break.
The tax credit was restored in 2023 as part of the Biden administration’s Inflation Reduction Act. However, Republicans in Congress and the Trump administration repealed the industry-wide rebate on September 30, 2025.
However, Tesla’s biggest financial boost didn’t come from tax breaks for electric vehicle buyers. It came from a government program to reduce carbon dioxide emissions across the entire automotive industry.
Under the regulatory framework, car manufacturers had to meet emission limits. If they did not comply, they would have to buy “emission credits” from companies that complied with the limits. And the only company that has always been below emission limits and had credits for sale was Tesla, as all its vehicles are electric.
That meant almost every other automaker in the US lined up to fill Tesla’s coffers as a result of the regulations.
Sales of these credits accounted for nearly 25% of the company’s revenue in 2008 and 10% of its revenue over the next five years.
Between 2008 and 2019, regulatory credit sales generated more than $2 billion for the company.
Tesla might have collapsed without those funds — a fact that didn’t escape Musk himself, as CNN points out.
In a tweet in 2020, Musk admitted that Tesla was almost forced to file for bankruptcy as recently as 2019. Even after overcoming the risk of bankruptcy, Tesla managed to turn a profit without the help of credit sales as recently as 2021.
As of 2019, regulatory credit sales have generated another $12.3 billion, with all of that money flowing almost directly into its bottom line. But that appropriations revenue is likely to dry up in the future, as Republicans in Congress have effectively gutted the program.
But Tesla’s value no longer has much to do with its cars. Instead, the company’s stock price is based on Musk’s promise that Tesla will soon offer widespread autonomous “robotaxis” and humanoid robots, a promise he has long tried to fulfill, but without much success.
Wall Street’s confidence in Musk is the main reason his fortune has reached previously unimaginable heights — at least for now, as long as his companies’ stock prices remain close to today’s levels. But that confidence comes from the fact that early on in his business, when he needed financial help more than anything else, it was the US government — not Wall Street — that provided him with the help he needed.
“It turned out that the existence of these companies was definitely positive for the government, for America and for society, so I don’t regret that the government gave him the money,” said Gerber, the early Tesla investor who is now critical of Musk. “The mistake the government made is that it should have acquired an equity stake.”
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