Elon Musk Spent $70 Million On a Gulfstream G650ER and Tesla Chipped In $700,000
When you’re a billionaire many times over, you get to play with expensive toys, like rare cars and private jets. Elon Musk is no exception. In fact, one of his latest acquisitions, a Gulfstream G650ER, made headlines in part because of its hefty price tag and in part because of SpaceX and Tesla’s role in the purchase. When you’re as wealthy as Elon Musk, Gulfstream jets aren’t major purchases, but his travel subsidies from Tesla made the news.
The Gulfstream G650ER bought by Elon Musk
The Gulfstream G650ER is not your typical business aircraft. For one thing, the ER holds the record for the longest range at 7,500 nm (nautical miles) – 500 nm longer than a 650 model. This added range is due to a $2 million upgrade that stores an extra two tons of fuel in the G650ER. It can soar at 652 mph when achieving maximum range capabilities and up to 709 mph when sacrificing range.
The cabin is filled with luxurious trimmings and amenities that up to 18 passengers can enjoy. Cabin monitors, lights, and temperature can all be controlled through a smartphone app. The Gulfstream G650ER also features two bathrooms and a wet galley.
At $66.5 million, not everyone can enjoy the grandeur the Gulfstream G650ER affords. That’s not to mention operating costs estimated at $3,662 an hour. According to Corporate Jet Investor, these GR650 variants are fairly rare, representing just under 2.5% of the Gulfstream fleet.
Tesla’s corporate jet subsidies
Shortly before 2018’s final quarterly earnings report of the year, the public learned that SpaceX had purchased a 2015 Gulfstream G650ER for CEO/CTO Elon Musk’s use. This would not be noteworthy, except that Tesla, of which Musk is also CEO, was billed $700,000 in expenses for its use – a sum the EV-maker paid.
The $700,000 covered 150,000 miles of flight time, with its bulk between company properties in California. However, some trips were overseas, including trips to Asia and Europe. Because Tesla, in particular, had made headlines and raised investor hackles for burning through cash while laying off large numbers of workers, news of the Gulfstream purchase caused a furor.
However, despite the controversy, a big part of SpaceX’s and Tesla’s success is Musk’s hands-on management. He would not be as effective – and by extension, neither would his companies – if he managed via video conference. While the public may raise eyebrows, Tesla investors, who are sitting on returns of nearly 9,000 percent from their IPO purchase to today, likely appreciate the face-to-face interaction with Tesla’s CEO.
Elon Musk’s road to wealth
Musk was born in South Africa. He was the son of Errol Musk, a wealthy entrepreneur who dabbled in several businesses, including partial ownership in an emerald mine. Musk attended universities in Canada and the U.S., ending up with bachelor’s degrees in physics and economics. He helped found a startup known as Zip2, which Compaq later bought for over $300 million. However, his work on X.com, an online bank that later became part of PayPal, accelerated his path to entrepreneurial fame and fortune.
He then founded SpaceX, a company that manufactures aerospace crafts and now works closely with NASA on their space program. SpaceX is also working on space tourism efforts and has already secured multi-million dollar price tags to transport some of the world’s other billionaires into space. A subdivision of SpaceX known as Starlink is positioning itself to be the dominant player in geo orbital satellite Internet provision, which can provide more consistent and faster high-speed Internet to areas of the world with poor Internet access.
Musk is also well-known for his work at Tesla, Inc., which manufactures electric vehicles and produces clean energy products, which might seem at odds with Musk’s purchase of the Gulfstream G650ER. Tesla’s vehicles have ranked at or toward the top-selling EVs in the world. The company also produces EV charging stations and receives considerable revenue from these over-the-air software upgrades and clean energy systems.
Other projects of Musk include OpenAI, an AI nonprofit research organization, and Neuralink, which develops interfaces between the brain and computers. Furthermore, the Boring Company, which he also founded, constructs tunnels and provides other infrastructure services. His outsized stakes in these companies have provided him with his immense wealth.