Tesla's Subsidy Quest Amid Musk’s Trump Endorsement
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Elon Musk, Tesla's CEO, recently endorsed Donald Trump for president, aligning with a candidate who opposes electric vehicle (EV) mandates and favors fossil fuel expansion. Despite Musk's backing of Trump's anti-EV rhetoric, Tesla Inc (TSLA:US) continues to lobby for U.S. government benefits that have driven its rapid growth in the EV market.
Tesla's rise has been fueled by government support, including tax breaks and regulatory credits, which reward manufacturers for meeting stringent emissions standards. Like Tesla, automakers like General Motors Co (GM:US) and Stellantis NV (STLA:US) have also utilized these credits to comply with regulations and offset emissions, helping them transition to EV production. While Musk often criticizes subsidies, Tesla continues to benefit from them. In filings with the Environmental Protection Agency (EPA), Tesla has advocated for stricter emissions rules to promote cleaner air, opposing Trump's policies.
This pragmatic approach reflects Musk's broader ambitions. While Tesla remains a dominant force in the EV industry, Musk's interests span artificial intelligence, space exploration, and beyond. According to management professor Andrew Ward, Musk may prioritize long-term goals over Tesla's immediate gains, even if it conflicts with Trump's agenda.
Despite his public alignment with Trump, Musk remains committed to Tesla's sustainability mission. Tesla recently lobbied for an outright ban on gasoline-powered cars by 2035, arguing that this is essential to address the climate crisis. Tesla’s sales of regulatory credits have generated billions, further bolstering the company’s finances. Meanwhile, companies like GM and Stellantis also benefit from these credits as they continue to build out their electric vehicle strategies.
Musk’s approach continues to send mixed signals, balancing his endorsement of Trump with the financial benefits Tesla, GM, and Stellantis gain from government-backed green initiatives. As Tesla leads the EV market, Musk’s evolving political alliances highlight the complexity of his business strategy.
On the congressional trading front, Ro Khanna reported a purchase of Tesla Inc stock in the range of $15,000 to $50,000 on July 1, 2024, and a sale in the range of $1,000 to $15,000 on July 2, 2024. Similarly, Ro Khanna disclosed the purchase of General Motors Co stock on July 2, 2024. Meanwhile, Congress members Michael Burgess and Daniel S. Goldman were seen engaging in stock trades in Stellantis during 2023.
