By endorsing Trump, Elon Musk is gambling with Tesla’s future

“I afloat endorse President Trump and dream for his accelerated recovery,” nan billionaire posted connected X. So overmuch for that vow to enactment connected nan sidelines. 

But it didn’t extremity there. Days later, The Wall Street Journal reported that Musk planned connected donating immense sums of his ain wealthiness to a ace PAC supporting Trump, perchance upwards of $45 cardinal a month. (Musk later disputed nan report, calling it “FAKE GNUS.”)

Whether he plans connected flooding nan predetermination pinch rate aliases not, Musk’s MAGA awakening is astir apt beautiful befuddling for his instrumentality base. After all, Musk has staked his bequest connected shifting nan world to renewable energy, and Trump is wide seen arsenic an accelerant for ambiance change. 

Trump besides poses a unsocial threat to Tesla, which is nan root of astir of Musk’s wealth. He has said successful nary uncertain position that if elected he would rotation backmost each of nan Biden administration’s investments successful EV charging infrastructure and incentives. And he has made electrical vehicles an onslaught statement successful his campaign, calling them expensive, overweight, and impractical. 

“I person nary objection to nan electrical vehicle, nan EV,” Trump said successful a caller question and reply pinch Bloomberg. “I deliberation it’s great. Elon is fantastic. I deliberation it’s great. I’ve driven them often and they’re wonderful. But you can’t person 100 percent of your cars electric. We can’t electrify our cities.”

And astatine nan Republican National Convention successful Milwaukee, Trump said that he would extremity nan “EV mandate” connected “day one” of his administration. That could besides see nan new automobile standards aimed astatine slashing greenhouse state emissions and spurring much EV sales.

If Trump wins and he succeeds successful reversing President Joe Biden’s Inflation Reduction Act, nan effect would beryllium felt successful Tesla’s conveyance sales. Today, anyone shopping for a caller Tesla Model 3 aliases Model Y will apt beryllium capable to return up to $7,500 disconnected nan acquisition value astatine nan constituent of sale, thanks to Biden’s EV taxation credit. Meanwhile, utilized Teslas suffice for a $4,000 taxation credit. The incentives bring nan value for nan new rear-wheel-drive Model 3 beneath $30,000 — even little erstwhile you use authorities credits. 

It’s nary concealed that Tesla’s income person been lackluster this year. Rising title has forced nan institution to slash prices, hurting its once-vaunted profit margins. And Musk’s online antics person further eroded nan brand’s reputation. Tesla income dropped 6.3 percent for nan 2nd 4th successful 2024, moreover arsenic full EV income climbed 7.3 percent, according to Kelley Blue Book.

Now Musk is risking moreover further bleeding by throwing his support pinch Trump, who will nary uncertainty do everything successful his powerfulness to destruct EV spending if he is elected. House Republicans person already fired respective shots crossed nan bow, voting for respective proposals that would rotation backmost nan IRA aliases scrap nan EV taxation credit. Trump would happily motion immoderate of these bills if fixed nan chance. 

Of course, if Tesla’s taxation credits spell bye-bye, truthful would everyone else’s. One could reason that nan bequest car manufacture relies connected nan government’s largesse much than Tesla, which has a immense caput commencement successful EV production, has aggregate factories operating astir nan globe, and has already built a reliable web of EV charging stations. Without nan credits, nan Model 3 would still apt beryllium 1 of nan astir affordable options retired there, while different automakers’ EVs would abruptly go much expensive. And their efforts to present much affordable models are still years distant from fruition. 

Musk has been a professional of nan taxation credits successful nan past, arguing that nan manufacture should guidelines connected its ain pinch authorities handouts. He besides said that nan authorities shouldn’t beryllium backing EV charging stations. “Take distant nan subsidies,” he said connected X earlier this week. “It will only thief Tesla.”

But you don’t request to look excessively acold backmost to spot nan limits of this viewpoint. Tesla sewage its commencement acknowledgment to a $475 cardinal indebtedness from nan Department of Energy astatine a captious clip successful nan company’s history. Several experts person noted that Tesla apt wouldn’t person survived, nor turned into nan world powerhouse it is today, without nan national loan. Musk’s different companies besides heavily trust connected authorities contracts, including SpaceX and its Starlink net business. 

Musk intelligibly has a cordial narration pinch Trump; nan 2 apparently chat a batch complete nan phone. And contempt pouring billions of dollars into EV development, nan Biden management has ever kept Musk and Tesla astatine arm’s length, snubbing them from White House events and omitting their names from property announcements. Musk bashed Biden arsenic “not nan friendliest” management backmost successful 2021. 

The Biden management has besides taken a sharper look astatine Tesla’s autonomous driving technology, opening investigations that could perchance consequence successful charges of securities and ligament fraud. Musk is astir apt hoping to nip these probes successful nan bud by supporting Trump’s bid for nan White House. 

If he succeeds, 1 tin ideate immoderate short-term successes for Tesla. The EV taxation credits are scrapped, arsenic are immoderate investigation into nan company’s self-driving claims. Corporate taxes are cut, business regulations autumn by nan wayside, and Tesla becomes little encumbered by allegations of labour abuse aliases racial and gender discrimination. Meanwhile, Musk’s pet causes for illustration migration crackdowns and gender conformity go nan rule of nan land. 

But location is truthful overmuch much to lose, including Tesla’s stated extremity of accelerating “the world’s modulation to sustainable energy,” arsenic it claims connected its website. A Trump triumph would beryllium highly bad for nan satellite and for nan renewable power sector. The erstwhile president has agelong railed against star and upwind power. And nan Republican Party is simply a awesome state of nan lipid and state industry. These are not forces that will usher successful a cleaner, much sustainable planet. Quite nan opposite.

Musk erstwhile said that he would ne'er get progressive successful authorities and that, erstwhile he does, he usually has to clasp his nose. Perhaps he should person followed his ain proposal and stayed retired of this race.