Too Much Nonsense About ‘Fiscal Cliff’: Tesla CEO
Elon Musk, Tesla CEO told CNBC on Thursday that he's not worried about the "fiscal cliff" and what it may mean for subsidies for the solar industry.
"Whether we go off the fiscal cliff or don't go off the cliff, there's way too much nonsense about this," Musk, who is also chairman of SolarCity, said. "This is not a cliff."
He said the solution to the problem is fairly obvious, spending cuts and higher taxes.
Out touting the initial public offering of SolarCity, Musk said it was "extremely unlikely" that subsidies for solar power will disappear completely even with the potential spending cuts from the fiscal cliff of automatic spending cuts and tax increase that go into effect at the end of the year.
But as they are scaled back, SolarCity must cut costs by about 5.5 percent a year for the next four years to achieve similar profits to what it already achieves now, he said.
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SolarCity, which installs solar panels, priced its IPO at $8 a share, well below of expected range of $13 to $15. The company raised about $92 million.
Musk said going public was a subject of "intense debate" among the board. But after consulting with big investors, Musk said the feedback was that SolarCity should go public now and "give the public markets an opportunity over the next several quarters to follow and evaluate the company, monitor its performance, really understand the business model."
