It should therefore come as no surprise that Tesla isn't much of a U.S. taxpayer. To the contrary, it receives tens of millions of dollars per quarter in what I see as U.S. subsidies. (Full disclosure: I'm shorting TSLA stock.)
There was $713 million in these payouts alone for the third quarter last year. But where is all this money going?
Guess what? Thanks to Tesla's SEC Form 10-Q dated July 29, we now know that TSLA has promised the Chinese government a minimum of $320 million a year.
You see, Tesla is building its new "Gigafactory 3" in China. What did Tesla and CEO Elon Musk have to promise in order to be allowed to build a factory there?
Just look at page 31 of Tesla's 10-Q. "Under the terms of the agreement, we are required to spend 14.08 billion renminbi [$2.04 billion] in capital expenditures over the next five years, and to generate 2.23 billion renminbi [$320 million] of annual tax revenue starting at the end of 2023."
It gets worse.
"If we are unwilling or unable to meet such target or obtain periodic project approvals, in accordance with the Chinese government's standard terms for such arrangements, we would be required to revert the site to local government and receive compensation for the remaining value of the land lease, buildings and fixtures," the filing says.
So let's see what this means:
1. Tesla gets tens of millions of dollars per quarter in what I view as U.S. subsidies.
2. Tesla is opening a big factory in China instead of the United States.
3. Tesla is investing $2.1 billion in this Chinese factory.
4. Tesla promises China $320 million in annual tax revenue.
5. If Tesla can't pay, China nabs the factory.
U.S. taxpayer funds -- and technology transfer -- secured!
Is Trump aware that Tesla is building a factory in China, collecting huge U.S. government payouts and paying a minimum of $320 million to the Chinese government? And if Tesla can't pay, China just nabs the factory?
(This column has been updated.)