“I’m more than MAGA.” Elon Musk shouted “I’m dark, gothic “MAGA”” while addressing the mammoth crowd of Republican presidential candidate Donald Trump at his Madison Square Garden rally Sunday. The Tesla CEO then pointed to his cap that bore Trump’s slogan in white gothic typeface “Make America Great again”.
Musk is a prominent figure within Donald Trump’s campaign for 2024, showing his enthusiastic support in spite of Trump’s longstanding opposition to green energy and electric vehicles.
Musk, in addition to attending rallies, has invested $118m in a super PAC that supports Trump. He is also offering daily $1 million prizes to voters from swing states.
Musk’s ownership in X, beyond financial contributions, has amplified the impact of his campaign on Trump. He uses his platform to promote pro Trump rhetoric and rally 200 million followers.
Musk’s X-feed has been a constant stream of Trump endorsements, and criticisms of the Biden administration, Vice President Kamala, and Vice President Harris as election day approaches.
Many have been left wondering why Musk, whose Tesla Empire has driven the US electric vehicle revolution, supports Trump, whose energy stance remains largely against clean energy policies.
Trump’s record of anti-EV
Trump’s opposition towards clean energy is not a secret.
He has repeatedly criticized climate change initiatives as “hoaxes”, and called the Biden administration’s clean energy policies and electric vehicle policies “lunacy”.
“Rot in Hell!” he has said to supporters of electric cars.
The Inflation Reduction Act of 2022 is a major concern for the EV Industry.
The act passed in 2022 has sparked a surge of investment in US-based EV infrastructure and manufacturing, prompting companies, to invest approximately $77.6 Billion in American EV Production.
In his 2024 plan, he intends to eliminate incentives offered by federal legislation for EV purchasers, including the $7,500 tax rebate.
Trump’s skepticism about environmental regulations extends even to the Environmental Protection Agency (EPA)’s new rules on tailpipe emission.
The EPA standards are intended to reduce carbon emission by promoting the sale of electric and plug in hybrid vehicles.
The auto industry will be expected to shift significantly towards greener technologies under the proposed regulations. These regulations aim to have 56% of all new vehicles sold as electric by 2032.
Trump’s opposition includes a pledge to dismantle EPA rules that he calls an “EV mandate”, which unfairly targets gasoline-powered vehicles.
Trump’s rollback on such policies could impact EV sales, automakers, and Musk’s Tesla.
Why is Musk backing Trump?
Musk’s words from the MSG rally may provide a clue to this riddle.
Musk responded, “I believe we can do at minimum $2 trillion” to a question that asked how much money a Republican government “could rip out of the wasted Harris-Biden Budget”.
You’re taxed at the end of it all. All government spending is taxation. Whether it’s direct taxation… or… all goverment expenditure, it becomes either inflation or direct taxation. “Your money is being wasted and the department of Government Efficiency is going to fix it!”
We will get the government out of your wallet and off your back!
Musk might be looking for something else, specifically a possible shift in regulatory oversight which could benefit the bottom line of his companies.
He has often clashed against the Federal Aviation Administration, the US Environmental Protection Agency and the Securities and Exchange Commission.
Federal agencies have scrutinized each of his major projects: Tesla’s autonomous driving technology, SpaceX launch protocols, and Neuralink animal testing practices.
Recent regulatory pressures have increased.
The FAA has grounded SpaceX’s launches several times for protocol violations. Meanwhile, the EPA launched an investigation against SpaceX after claiming that it discharged unsafe wastewater.
California recently rejected Musk’s request to launch additional SpaceX rockets in the state. The decision cited both Musk’s controversial political views and environmental concerns.
Tesla’s efforts to promote “full self-driving” technology has attracted scrutiny from the SEC and National Highway Traffic Safety Administration.
Musk’s anti-regulation stance has grown louder in response to these obstacles.
Trump and Musk both envision a smaller government with less funding for agencies such as the EPA or FAA.
Musk could benefit from a Trump-led administration by reducing regulatory barriers. This would allow him to speed up projects at Tesla, SpaceX and Neuralink, with minimal oversight.
Musk’s involvement in the ‘Department of Government Efficiency.
Trump’s contempt for agencies was evident when he announced in September that Musk would lead a government efficiency commission to audit federal agencies and find places for cuts.
Musk was appointed to the position of “secretary for cost-cutting”. Trump made this announcement during an interview with Fox News in early October.
Trump said, “He is dying to do it.”
Musk’s “Doge Department” echoes his view on the need for government functions to be streamlined.
Musk could have a new level of influence on the regulatory agencies that have been challenging his companies.
This promise is not free of controversy. Musk’s auditing of federal agencies is a controversial promise.
Musk could find that by supporting Trump’s agenda of deregulation, he can reduce the interference from agencies, which he feels stifle technology advancement.
Musk’s influence in Trump’s changing stance on EVs
Trump has also softened his stance on EVs in recent months, despite his historic anti-EV rhetoric.
He acknowledged Musk’s backing in August by stating, at an Atlanta rally, that he would be open to the idea of a “very tiny slice” (or fraction) of the auto market becoming electric.
Musk’s support may have moderated his opposition.
Trump also recently praised Tesla products on Musk’s social platform X (formerly known as Twitter), calling them “incredible.”
Although he insists that combustion engines should continue to be dominant, his positive comments on Tesla suggest he could accommodate a small EV market in a Musk-aligned government.
This could be a sign that Trump is willing compromise his clean-energy position if it means Musk’s financial support and backing.
Experts say that Trump’s repression of EV adoption is unlikely to have any impact on the overall adoption rate.
Analysts believe that while Trump’s cancellation of federal EV credits would affect consumer purchasing power and EV adoption, it will not completely derail EV adoption.
James Lucier of Capital Alpha Partners notes in a Bloomberg article that a Trump Administration could tighten regulations on EV Tax Credits, making it harder for vehicles to qualify based upon component sourcing.
Experts in electric vehicles argue that federal policy alone cannot stop the rapid transition to electric cars.
Nick Nigro of Atlas Public Policy said, “There is no stopping it,” in the report. He stressed that the industry’s trajectory will remain irreversible even if Trump slows down the transition.
In addition, 17 US States offer EV incentives that are independent of federal programs.
Colorado, for example, offers substantial rebates up to $5,000 to EV buyers. This ensures that the consumer has affordable options.
Automakers are also preparing to meet stricter emission standards on other important markets, such as California, China and Europe.
The US policy under Trump, as automakers focus their strategies on these regions, may not have a significant impact on the global EV movement.
What does Musk’s support for Trump mean to Tesla investors?
Musk is the CEO of a publicly traded company, and he has to answer to investors.
Musk’s friendship with Trump is not shared by all Tesla shareholders, despite Musk’s long-term calculations.
Tesla’s online forum for retail investors received many questions about Musk’s political views and his posts on X, formerly Twitter, as well as his support of Trump’s reelection.
Musk’s activism has raised concerns among many about the impact it could have on Tesla’s brand value and shareholder value.
A retail investor said, “Elon’s political activism appears at odds with his CEO role to protect shareholder values.” This sparked a discussion which received over 500 votes.
A question that received a lot of votes asked whether the board at Tesla was taking any steps to make sure Musk’s involvement in politics wouldn’t interfere with the company’s mission.
Tesla’s stock rose by 22% in the quarter following its earnings call, despite these concerns.
Wall Street analyst reports compiled by FactSet made little mention of Musk’s political activities. His political views are also rarely discussed at shareholder meetings.
Tesla’s 10-Q filing to the SEC did not mention Trump or Musk’s political activity in the section “risk factors”.
Gene Munster of Deepwater Asset Management, a Tesla bull, said earlier this month that Musk’s comments on politics could have reduced US deliveries by up to 10k cars. However, Tesla reported a 6 percent increase year-over-year in third-quarter deliveries, despite falling short of analysts’ expectations.
In the face of increasing competition, the company used discounts and incentives in order to boost sales.
This article Trump opposes EVs: Why is Elon Musk supporting him? The COINPAPER published the first article on this topic.