Tesla CEO Elon Musk recently endorsed Donald Trump for president, aligning himself with a candidate who opposes many of the policies that have been instrumental to Tesla’s success.
Despite Trump’s calls to “drill, baby, drill,” end the “electric vehicle mandate,” and reduce government subsidies, Tesla continues to rely heavily on government support to maintain its position as the leading electric vehicle (EV) manufacturer in the United States.
Government loans, tax breaks, and other policies have been critical to Tesla’s rapid growth, and despite Musk’s increasing alignment with Republican rhetoric, the company remains actively engaged in lobbying efforts to secure continued benefits from U.S. and state governments. For instance, in February, Tesla urged the Biden administration to allow California to impose stricter vehicle emissions standards, a move directly at odds with Trump’s stance. Additionally, Tesla has lobbied for regulations to phase out the production of gasoline-powered cars by 2035, a policy Trump has vehemently criticized.
Musk’s approach to subsidies has often been seen as contradictory. While he publicly expresses disdain for government intervention, Tesla continues to benefit from substantial public funds. “Elon tends to say he’s hostile to subsidies while Tesla is gobbling them up like a hungry Godzilla,” said Mike Murphy, a Republican strategist and advocate for bipartisan support of EVs.
Sources familiar with Musk’s management style describe his stance on subsidies as pragmatic, accepting government support when available. This willingness to overlook Republican opposition to EV incentives suggests that Musk’s broader goals might extend beyond Tesla’s immediate interests. “Tesla is not the endgame for him,” said Andrew Ward, a management professor at Lehigh University, pointing to Musk’s ventures in artificial intelligence, space exploration, and neuroscience.
Despite Musk’s endorsement of Trump, Tesla has continued to lobby for policies that contradict the former president’s views. A July 2023 filing with the U.S. Environmental Protection Agency (EPA) shows Tesla advocating for stricter emissions limits, which would increase demand for regulatory credits—credits that Tesla sells to other car manufacturers, generating significant revenue for the company.
Tesla’s dependence on government assistance dates back to its early days when the company received a $465 million loan from the U.S. Department of Energy to develop its first major manufacturing facility in California. More recently, Tesla has earned nearly $9 billion since 2018 by selling regulatory credits, which are awarded to manufacturers who exceed emissions standards and can be sold to those who do not.
Musk’s political alignment has shifted in recent years. After initially supporting President Joe Biden’s climate change agenda, Musk grew disillusioned with the administration, especially after Tesla was excluded from a 2021 White House event on EVs. Despite this, Tesla has continued to benefit from the Biden administration’s policies, including the Inflation Reduction Act, which offers significant subsidies for clean energy.
Musk’s support for Trump, solidified after a failed assassination attempt on the former president, has raised questions about his motivations. Critics argue that Musk’s endorsement of Trump is at odds with Tesla’s reliance on government support for the EV industry. Ross Gerber, a prominent Tesla investor, told Reuters that Musk’s support for Trump “is 100% contrary to his own personal financial interests” and those of Tesla.
As Musk prepares to interview Trump on his social media platform, X, the growing bond between the two figures could further shape the political and business landscape. However, the dissonance between Musk’s public statements and Tesla’s ongoing lobbying efforts highlights the complexities of balancing ideology with business pragmatism.
Source: Reuters