Tesla CEO Elon Musk is firmly in former President Donald Trump’s nook politically, however what a possible Trump Administration might imply for the electrical car maker that pays Musk billions is unclear—even to Musk himself.
Throughout a name with monetary analysts on Tuesday, Wells Fargo director Colin Langan requested Musk to clarify the impression of a Trump win and the potential wipeout of a federal $7,500 tax credit score for electrical autos.
“I guess there would be some impact,” mentioned Musk. “It would be devastating for our competitors, and it would hurt Tesla slightly.”
The CEO additionally famous that as a result of Trump has promised heavy tariffs on autos produced in Mexico, Tesla would pull again on investing in a manufacturing unit it had deliberate to open in Monterrey in 2026. “If that’s going to be the case, we kind of need to see how things play out politically,” he mentioned. Yesterday, Musk denied stories that he would pump $45 million monthly into Trump’s marketing campaign.
Talking on CNBC earlier than the earnings name, Wedbush Securities tech analyst Dan Ives mentioned {that a} Trump presidency might be unfavourable for the general EV market as a result of Trump might remove the Inflation Discount Act and with it the tax credit for EVs and sure plug-in hybrids. That will imply an administration underneath Kamala Harris, the presumptive Democratic celebration nominee, might be a optimistic for the EV trade.
But, Trump is perhaps higher for the regulatory agenda wanted to advertise full-self driving and autonomy, which is a key part of Tesla’s progress technique, mentioned Ives.
“Musk has been background noise under the Biden Administration and in a Trump administration, is that something that will be more front and center?” mentioned Ives. “That’s why I would say Tesla is part of that Trump trade.”
Musk dismissed the notion that regulators may balk at a fleet of Tesla-made, self-driving robotaxis with out steering wheels and pedals. An analyst requested Musk to clarify why regulatory threat wasn’t a problem for Tesla, when Basic Motors had paused manufacturing of its Origin car that doesn’t have a steering wheel, in favor of its Chevrolet Bolt, partly due to regulation. The Cruise Origin autonomous car would wish approval from the Nationwide Freeway Visitors Security Administration as a result of it doesn’t have conventional handbook controls like a steering wheel and pedals, that are required by present security laws, and had been written for automobiles with human drivers and never absolutely autonomous autos.
“The main reason with switching from the Origin to the Bolt is we extinguish the regulatory risk,” GM CEO Mary Barra mentioned, in line with a Reuters report.
“The real reason they canceled it is because GM can’t make it work,” mentioned Musk, including that the automaker’s expertise “is not up to par.” He mentioned blaming regulators was “misleading.”
Jim Cain, an government director at GM, instructed Fortune Musk is flat mistaken.
“All of those statements are categorically false,” mentioned Cain, who listened to Musk’s feedback throughout the earnings name. “The Origin vehicle faced a lot of hurdles getting certified because it doesn’t have a steering wheel, it doesn’t have a brake pedal, and it has a unique seating layout that requires a federal motor vehicle safety waiver—full stop.”
Cain mentioned Cruise expertise improves day-after-day due to the best way it leverages its knowledge set with AI. “And so far, they have driven more than 5 million fully autonomous miles and Tesla has driven exactly zero.”
Musk has an unshakeable religion in Tesla’s energy to “solve autonomy,” which he reiterated Tuesday, at the same time as Tesla reported monetary outcomes displaying web income dropped 45%, marking its second quarter of sluggish progress and fourth straight quarter of falling quarterly earnings. Automotive trade knowledge additionally confirmed that Tesla continues to lose recognition in California, the place gross sales fell 24% within the second quarter. In the meantime, Trump has pledged to finish what he known as the “green new scam,” promising to abolish “the electric-vehicle mandate on day one.”
In response to Ives, if autonomy is the strategic way forward for Tesla, it is perhaps extra useful for Tesla to have much less regulation, which is likelier underneath a Trump presidency versus a Harris presidency.
“The cherry on top of what could be the sundae” for traders is how the corporate will impression the robotics market and its efforts on full-self driving and autonomy, mentioned Ives. Finally, that’s how the corporate might doubtlessly attain a $1 trillion and even $2 trillion valuation, he added.
