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Let me start by saying that I love my Tesla Model Y. It’s a great car: reliable, inexpensive to drive, comfortable, speedy, high tech. But I’ve been heartbroken over the turn of events of the company, to the point that I put on one of the “I bought this car before we knew Elon was crazy” bumper stickers. I’m not alone. Tesla’s pivot away from loyal progressives has seen its essential customer base fleeing en masse. We’re horrified by the Trump-Musk tag team that is dismantling the US federal government.
Meanwhile, Tesla’s stock price has tumbled quickly from its 52-week high of $488 to today’s opening price of $235. JP Morgan, Wells Fargo, UBS, and Redburn Atlantic have all downgraded Tesla’s stock. And there’s the fact, captured succinctly by Nobel Prize-winning economist Paul Krugman today, that “trying to put an intellectual gloss on Trumpist international economic policy is sanewashing that misinforms readers rather than helping their understanding.” Musk is intertwined with Trump for good or bad — but right now it seems pretty bad.
Idealistic at best, Tesla’s pivot to right-wingers hasn’t taken on any real momentum. But it has pumped up some of Musk’s other companies, and many members of the Tesla board have already become wealthy beyond their dreams by selling huge swaths of their Tesla stock. Can Tesla recover? And, really, what does the Tesla brand mean anymore?
Musk has been the face of Tesla, its driving force, for as long as most of us can remember. His public profile and proclamations about the company’s innovations, excellence, and exceptionalism were key ingredients for investors and car buyers alike. No more. Musk is clear: he doesn’t like them who brought him to the dance, and the result is that the company seems to be leaning precariously over a financial cliff.
The flight away from Tesla’s all-electric vehicle sales and plunging stock price hasn’t stopped Musk’s laser focus on promoting US hegemony. Recently, the Tesla CEO awarded Republican members of Congress who want to impeach non-Trump-friendly judges. These outspoken Republicans received the maximum allowable donations Musk could provide to their campaign coffers.
Has Tesla, and particularly CEO Elon Musk, pushed the limits too far?
DOGE debacle: After several capitulations, President Donald J. Trump admitted that the Department of Government Efficiency (DOGE) is headed up by Elon Musk. Musk’s position as Trump Whisperer has reflected an internal company hope that Tesla’s pivot to a right-wing consumer base will spark new sales. A Tesla pop-up car lot on the White House lawn was an overt endorsement for Republicans to open their wallets to the co-president’s company. It’s an odd position to take, as electric vehicles have long been favored by people buying them for environmental reasons, and this is uncommon among conservatives and their right-leaning allies.
Trump’s tariffs will impede Tesla production: Tesla has sent a letter to US trade representative Jamieson Greer with a warning about the harmful impact on automakers and consumers of Trump’s tariffs against the US. The letter assures Greer that Tesla supports fair trade, yet they want to remind him that, as other countries respond to US trade sanctions, US exporters can be exposed to disproportionate impacts. The letter says that, “even with aggressive localization of the supply chain, certain parts and components are difficult or impossible to source within the US.”
Loss of tax credits can have lasting repercussions: Trump’s policies have significant regressive implications for domestic battery and EV manufacturing. To facilitate analysis of the broader economic impacts of these potential changes to federal energy and climate policies, the REPEAT Project has developed updated scenarios assessing how these policies might influence the US vehicle market, as well as their implications for domestic battery and EV manufacturing. Musk’s calculations on the EV tax credit are likely skewed, and he’s probably rethinking the impact to Tesla if the EV tax credit is repealed.
Automotive industry uncertainty: Tesla’s website says, “We’re building a world powered by solar energy, running on batteries, and transported by electric vehicles.” The re-election of President Donald J. Trump has created considerable uncertainty regarding the future of the US automotive industry and the nation’s transition to electrified vehicles. Lost in MAGA discussions is the fact that fossil fuel vehicles damage the planet. Internal combustion engines create air pollution in two ways: (1) by releasing primary pollutants directly into the atmosphere and (2) by releasing direct emissions that create secondary pollution when they react chemically with elements of the atmosphere.
Lobbyists and officials from several car companies want the Biden era clean car regulations to remain largely intact, with some changes — more time for compliance and lower penalties for companies that don’t meet the requirements are two examples.
The Tesla Chair: Robyn Denholm, hand-picked by Musk to run Tesla’s board, is the best-paid chair at any public company in the US. Her Tesla compensation since she first joined the board in 2014 has totaled about $682 million in cash and stock, based on recent market prices, according to a Reuters analysis. The Australian businesswoman has been so richly compensated as Tesla chair that a shareholder lawsuit recently forced her to return part of her fortune. “With her wealth has come criticism of her compensation,” Reuters states, “and pointed questions about whether the windfall is compromising her oversight of Tesla and the billionaire who enriched her.”
Internet in remote (and urban) locations: Starlink is a constellation of thousands of small satellites in low Earth orbit that provide internet access across the globe. Operated by the Department of Government Efficiency’s unpaid advisor, Elon Musk, Starlink has become accessible to the various White House buildings and properties. White House officials said the installation was an effort to increase internet availability at the complex. They said that some areas of the property could not get cell service and that the existing Wi-Fi infrastructure was overtaxed.
The General Services Administration (GSA) already had employed Starlink for its internet services. Starlink is generally employed in areas that are too remote for internet providers or in times of emergencies. Washington, DC does have several internet providers in place. The deployment raised concerns among many in the security community, as while encrypted, Starlink likely does not meet the classified security standards required for White House communications.
As a spinoff from SpaceX, Starlink is one of the Musk companies that has regulatory matters before or contracts with the federal government. Conflict of interest, anyone?
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