Given Elon Musk’s dubious track record for hitting his goals, it may be a roll of the dice whether the Tesla CEO delivers a profit later this year. Fittingly, his success will depend partly on money from Nevada casinos.
Since 2015, Tesla has boosted its bottom line by selling tax credits to casinos such as the MGM Grand.
The casinos use the credits, purchased at a discount, to lower the gambling taxes they pay the state. Tesla uses the proceeds to ease its losses or increase its profit. Musk told investors on June 5 that “it’s looking like” the company will be profitable later this year.
So far, Tesla has sold $131 million in credits to casinos and has booked a total of $163 million in anticipation of more sales soon.
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This is absurd! And it demonstrates why giving such companies tax credits is a bad idea all-round.