Tesla CEO Elon Musk is politically firmly on the side of former President Donald Trump. But what a possible Trump administration could mean for the electrical automobile manufacturer, which pays Musk billions, is unclear – not even Musk himself.
While a conversation with financial analysts On Tuesday, Wells Fargo CEO Colin Langan asked Musk to clarify the impact of a Trump victory and the potential destruction of a $7,500 federal tax credit for electric vehicles.
“I guess it would have an impact,” Musk said. “It would be devastating for our competitors and would hurt Tesla slightly.”
The CEO also noted that Tesla would pull back its investment in a factory scheduled to open in Monterrey in 2026 because Trump had announced high tariffs on vehicles produced in Mexico. “If that’s the case, we’ll have to wait and see how things develop politically,” he said. Yesterday, Musk denied reports that he would pump $45 million a month into Trump’s election campaign.
Speaking of CNBC before the profit discussion, Dan Ives, technical analyst at Wedbush Securities said that a Trump presidency could have a negative impact on all the EV market, as Trump Inflation Reduction Act and with it the Tax breaks for electric vehicles and certain plug-in hybrids. This would mean that an administration under Kamala Harris, the likely Democratic Party candidate, could have a positive impact on the electrical vehicle industry.
Still, Trump could also be higher suited to implement the regulatory agenda needed to advertise autonomous driving and automobile autonomy, a key a part of Tesla’s growth strategy, Ives said.
“Musk was just background noise under the Biden administration, and will that be more prominent under a Trump administration?” Ives asked. “So I would say Tesla is part of that Trump deal.”
Musk dismissed the notion that regulators might shrink back from a fleet of self-driving robotaxis without steering wheels and pedals from Tesla. One analyst asked Musk to clarify why regulatory risk was not a problem for Tesla while General Motors had suspended production of its steering-wheel-less Origin vehicle in favor of its Chevrolet Bolt. partly on account of regulation. The Cruise Origin autonomous vehicle would have to be approved by the National Highway Traffic Safety Administration since it doesn’t have traditional manual controls comparable to a steering wheel and pedals required by current safety regulations and is designed for cars with human drivers, not fully autonomous vehicles.
“The main reason for switching from Origin to Bolt is to eliminate the regulatory risk,” said GM CEO Mary Barra, based on a Reuters Report.
“The real reason they canceled it is because GM can’t make it work,” Musk said, adding that the automaker’s technology was “not up to scratch.” He said blaming regulators was “misleading.”
Jim Cain, an executive director at GM, said Assets Musk is totally flawed.
“All of these statements are categorically false,” said Cain, who listened to Musk’s comments throughout the conference call. “The Origin vehicle had to overcome many hurdles to get approved because it has no steering wheel, no brake pedal and a unique seating arrangement that requires a federal motor vehicle safety exemption – period.”
Cain said Cruise’s technology is improving on daily basis since it uses artificial intelligence to leverage its data sets. “And so far they’ve driven more than 5 million miles fully autonomously, whereas Tesla has driven exactly zero.”
Musk has an unwavering belief in Tesla’s ability to “solve the autonomy problem,” which he reiterated on Tuesday, at the same time as Tesla reported financial results Net profit fell 45%, marking the second quarter of sluggish growth and the fourth consecutive quarter of falling quarterly profits. Auto industry data also showed Tesla continuing to lose popularity in California, where sales fell 24% within the second quarter. Meanwhile, Trump has vowed to place an end to what he called the “green new scam” by promising to eliminate “the electric vehicle mandate on day one.”
If autonomy is Tesla’s strategic future, Ives said it is perhaps more helpful for Tesla to have less regulation, which could be more likely under a Trump presidency than a Harris presidency.
The “icing on the cake” for investors is how the corporate will impact the robotics market and the way it handles its efforts toward fully autonomous driving and autonomy, Ives said. Ultimately, this might potentially give the corporate a valuation of $1 trillion and even $2 trillion, he added.
