Elon Musk, the CEO of Tesla, recently endorsed Donald Trump for president, despite Trump’s stance on energy and electric vehicles (EVs) that contrasts with the policies that have supported Tesla’s rise as a leading EV manufacturer in the U.S. Government loans, tax incentives, and other policies have been crucial to Tesla’s success, leading the company to continue lobbying for benefits traditionally supported by Democrats, despite Musk’s growing alignment with Republican rhetoric.
For example, in February, Tesla filed with the U.S. Environmental Protection Agency (EPA), urging the Biden administration to allow California to implement stricter vehicle emissions rules—a policy Trump opposes. Earlier, Tesla had also lobbied for regulations to ban the production of most new gasoline cars by 2035, a proposal criticized by Trump and others on the right.
Musk’s actions reflect a pattern of sending mixed signals regarding business and politics. While he often speaks out against subsidies, Tesla continues to benefit from them. Mike Murphy, a Republican strategist, notes that Musk criticizes subsidies publicly while Tesla capitalizes on them. Those familiar with Musk’s management style describe his approach to subsidies as pragmatic, taking advantage of available public funds. Musk’s support for Trump indicates a broader focus on long-term goals that might not align with Tesla’s immediate business interests. As Andrew Ward, a management professor, suggests, Musk’s ambitions in other sectors, such as artificial intelligence and space exploration, might lead him to prioritize these over short-term gains for Tesla.
Neither Musk nor Tesla responded to requests for comment, and a spokesman for Trump and the White House also declined to comment. The relationship between Musk and Trump may be further showcased when Musk interviews Trump on X, Musk’s social media platform. It remains unclear what specific goals Musk aims to achieve with his increasing rejection of progressive policies, including EV subsidies and identity politics.
Despite Musk’s shifting political stance, Tesla’s history shows it has consistently benefited from government assistance due to its role in promoting cleaner vehicles. Tesla’s first major factory in Fremont, California, was developed with the help of a $465 million loan from the U.S. Department of Energy, which Tesla repaid within three years. Since 2018, Tesla has also earned nearly $9 billion from selling regulatory credits, awarded by federal and state governments to manufacturers that exceed emissions standards.
A review of Congressional lobbying records and Tesla’s public filings reveals that the company continues to influence public policy to maintain such benefits. In a February filing with the U.S. Department of the Treasury, Tesla emphasized the need for ongoing government support to accelerate the transition from fossil fuels, reduce greenhouse gas emissions, and protect public health.
Elon Musk has had a complex relationship with Donald Trump, especially concerning climate change and environmental policies. In 2017, Musk left White House advisory panels after Trump pulled the U.S. out of the Paris Agreement, emphasizing that climate change is real and that leaving the agreement was bad for both America and the world. Musk was initially enthusiastic about President Joe Biden’s climate agenda after Trump’s 2020 election loss, expressing optimism about sustainable energy.
However, Musk’s support for Biden waned after Tesla was excluded from a 2021 White House event with other EV manufacturers. By December of that year, Musk distanced himself from Biden’s policies, particularly criticizing the Inflation Reduction Act (IRA), which included clean energy subsidies. Despite initially opposing the IRA, Tesla has since praised the law, recognizing the significant financial benefits it could bring, including up to $250 million per quarter from tax credits for battery manufacturing.
Tesla continues to lobby for stricter emissions standards, which indirectly benefit the company by increasing demand for regulatory credits from manufacturers of less efficient vehicles. These credits have been highly profitable for Tesla, generating $890 million in just one quarter. Musk has publicly called for an end to subsidies, arguing that it would ultimately benefit Tesla, a sentiment that contrasts with Tesla’s financial gains from such policies.
Some shareholders, like investor Ross Gerber, argue that Musk’s support for Trump is contrary to both his personal financial interests and Tesla’s role as a leader in clean energy. Former Tesla employees suggest that Musk’s actions reflect a balance between his ideological opposition to government intervention and the pragmatic acceptance of available benefits.
Tesla’s lobbying efforts also contradict Trump’s stance on EV mandates. In a July 2023 filing with the EPA, Tesla advocated for the end of gasoline car production, deeming it essential to combat the escalating climate crisis. While Musk has downplayed the short-term risks of climate change, he acknowledges its long-term accuracy.
The contradictions extend beyond environmental issues. In a 2022 filing with California’s emissions regulator, Tesla positioned itself as a leader in diversity and inclusion, highlighting its commitment to supporting communities of color disproportionately affected by air pollution. This stance contrasts sharply with Musk’s growing disdain for identity politics, which has led him to publicly denounce the Democratic Party, even calling Vice President Kamala Harris a “communist” in a recent social media post. Harris’s campaign spokesperson responded by accusing Trump of being influenced by extremist billionaires like Musk, who seeks tax handouts at the expense of the middle class.
Source: reuters
