In late 2008, markets were in freefall as the global financial system was on life support. Lawmakers were debating spending trillions of dollars to stave off total collapse.
At the time, one unknown 38-year-old CEO pleaded for assistance in bringing one of his cheaper electric sedans to market.
“We can’t move forward with that without a major amount of capital,” Tesla CEO TSLA Elon Musk said in December 2008. This was back in the days when Tesla was largely still a startup.
Tesla received a $465 million loan to build and design new electric cars in a manufacturing plant in Fremont, California.
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And the rest is history. Tesla launched its initial public offering (IPO) a little over a year later and has returned over 17,000% since President Barack Obama handed out $90 billion to clean energy firms as though it were Christmas candy.
As Bloomberg pointed out, “Tesla wouldn’t be Tesla without stimulus spending.”
Had the government not given $465 million to Tesla when Musk really needed it, investors would never have been able to turn every $1,000 invested into over $174,000 (before taxes) today.
That $90 billion figure refers to all clean energy in the $879 billion stimulus Obama signed into law on Feb. 17, 2009. The stimulus was controversial. Though stuffed with tax breaks and building projects, it also had head-scratching provisions like spending $71,263 to study the effects of cocaine on monkeys.
But when it comes to clean energy, at least, the success of the last stimulus was undeniable because it wasn’t just Tesla.
In the Obama years, wind power in the U.S. quadrupled. Solar power generation grew by a staggering 3,900%. And the cost of electric vehicle batteries fell by more than 70%.
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You can see the effects of this in the First Trust NASDAQ Clean Energy Index Fund QCLN, which has returned 541% compared to 453% for the S&P 500, since Obama breathed life into the U.S. renewables sector.
In August, President Joe Biden signed another $369 billion in clean energy stimulus into law. It amounts to tens of billions of dollars in tax credits, paired with direct spending on clean energy, for the sector.
If $89 billion created Tesla as we know it, sparked a 3,900% rise in the solar industry and kicked off a clean energy rally that’s outpaced the S&P 500 over 13 years, what will $369 billion do for clean energy investments today?
For Investors: Clean Energy presents a massive opportunity for investors. The stock market has a number of stocks and funds outperforming the market. The startup world presents similar strong investment opportunities. Startups like YouSolar are capitalizing on this billion dollar trend with their nano-grid batteries.
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