Elon Musk: Trump Presidency Could Harm Tesla Competitors
Tesla CEO Elon Musk is firmly in the political corner of former President Donald Trump, but what a potential Trump administration could mean for the electric carmaker that paid Musk billions of dollars remains unclear, even to Musk himself.
While a call with financial analysts on Tuesday, Wells Fargo Director Colin Langan asked Musk to explain the impact of Trump’s victory and the possibility of wiping out $7,500 federal tax credit for electric vehicles.
“I guess there will be some impact,” Musk said. “It will be devastating to our competitors and it will hurt Tesla a little bit.”
The CEO also noted that because Trump promised to impose high tariffs on cars made in Mexico, Tesla would pull back on its investment in the factory it had planned to open. in Monterrey in 2026“If that happens, we’ll have to see how things play out politically,” he said. Yesterday, Musk Report rejected that he would pump $45 million a month into Trump’s campaign.
Talk about CNBC ahead of earnings call, Wedbush Securities technology analyst Dan Ives said a Trump presidency could have a negative impact on the entire electric vehicle market because Trump could eliminate Inflationary Reduction Act and with it tax credits for electric vehicles and some plug-in hybrids. That means an administration under Kamala Harris, the presumptive Democratic nominee, could be a positive for the electric vehicle industry.
However, Ives said Trump would likely be more aligned with the regulatory agenda needed to push for self-driving and fully autonomous capabilities, which are a key component of Tesla’s growth strategy.
“Musk has been background noise under the Biden administration and under the Trump administration, is that something that’s going to become more of a focus?” Ives said. “That’s why I think Tesla is part of that Trump deal.”
Musk dismissed the notion that regulators might object to a fleet of Tesla-made self-driving robot taxis that have no steering wheels or pedals. One analyst asked Musk to explain why regulatory risk is not an issue for Tesla, when Automobile Corporation has halted production of the steering-wheel-less Origin, replacing it with the Chevrolet Bolt, Partly due to regulation. The Cruise Origin autonomous vehicle will need approval from the National Highway Traffic Safety Administration because it lacks traditional manual controls like a steering wheel and pedals, which are required under current safety regulations, and is designed for human-driven vehicles, not fully autonomous ones.
“The main reason for moving from Origin to Bolt is we eliminate the legal risk,” GM CEO Mary Barra said, according to a Reuters report.
“The real reason they canceled the project was because GM couldn’t make it work,” Musk said, adding that the automaker’s technology was “not up to par.” He said blaming regulators was “misleading.”
Jim Cain, CEO of GM, said Luck Musk is completely wrong.
“All of those claims are completely false,” said Cain, who listened to Musk’s comments on the earnings call. “The Origin car faced a lot of hurdles to certification because it had no steering wheel, no brake pedal, and a unique seating arrangement that required a federal motor vehicle safety exemption—period.”
Cain said Cruise’s technology improves every day because of how it leverages its data set with AI. “And to date, they’ve driven over 5 million fully autonomous miles, and Tesla has driven exactly zero miles.”
Musk has unshakable faith in Tesla’s ability to “solve the autonomy problem,” something he reiterated on Tuesday, even as Tesla financial results report reported a 45% drop in net income, marking a second quarter of sluggish growth and a fourth straight quarter of declining quarterly earnings. Auto industry data also showed Tesla continued to lose popularity in California, where Sales down 24% in the second quarter. Meanwhile, Trump has pledged to end what he called the “new green scam”, promising to abolish “electric vehicle mandates from day one”.
If autonomy is Tesla’s strategic future, then less regulation could benefit Tesla, which is more likely to happen under a Trump presidency than under a Harris presidency, according to Ives.
“The most attractive part of what could be the dessert” for investors is how the company will impact the robotics market and its efforts in self-driving and fully autonomous vehicles, Ives said. Ultimately, that’s how the company could potentially reach a $1 trillion or even $2 trillion valuation, he added.
