Tesla CEO Elon Musk has intensified his support for a Republican presidential ticket led by candidates who are staunchly critical of government subsidies, which have significantly benefited his company and the broader electric vehicle (EV) industry.
Senator J.D. Vance, the new running mate for former President Donald Trump, holds an even more extreme position on this issue than many of his Republican peers. Despite this, Musk remains dismissive of any potential negative impact on his company.
“Take away the subsidies,” Musk declared early Tuesday morning. “It will only help Tesla.”
Vance, however, aims to go beyond eliminating EV subsidies. In the Senate, he champions the Drive American Act, which proposes to replace EV subsidies with the America First Vehicle Credit, incentivizing gas-powered vehicles instead.
Following his endorsement of Trump, Musk publicly supported Vance, stating that the new ticket “Resounds with victory.”
Wall Street analysts are divided on Musk’s strategy. Some believe that eliminating subsidies could harm Tesla’s competitors more than Tesla itself, potentially widening its market lead. Others, however, are skeptical of this outcome.
Musk’s stance overlooks his own history of benefiting from substantial government support over the years. He maintains a direct line of communication with Trump, frequently discussing EV issues. Musk claims to be persuasive, although Trump remains publicly unconvinced about EVs, often criticizing them during campaign events.
Despite Trump’s personal admiration for Musk, he has not endorsed EVs. At a recent rally in Florida, Trump disparaged the idea of driving electric cars, prompting boos from the crowd.
Musk has committed $45 million per month to a pro-Trump super-PAC, according to The Wall Street Journal, and has actively lobbied for Vance in recent conversations with Trump, as reported by CNN.
Potential Impacts on Tesla and the EV Industry
The potential impact of a Trump-Vance administration on Tesla and the broader EV sector is a topic of debate on Wall Street. Dan Ives of Wedbush Securities argues that Tesla’s leading position could help it withstand policy changes and maintain its competitive edge. In contrast, Ron Jewsikow of Guggenheim believes that repealing the $7,500 EV tax credit would undermine a crucial affordability factor for Tesla vehicles.
Musk has long opposed government credits for all industries, reiterating his stance on Tuesday. Tesla representatives did not respond to inquiries about whether Musk supports Vance’s proposed subsidies for gas-powered vehicles.
Although Musk downplays the benefits Tesla receives from government incentives, the company has a history of substantial government support. Subsidy Tracker estimates that Tesla has received nearly $3 billion in government awards since 2007. A Los Angeles Times investigation suggested that Musk’s various companies had received approximately $4.9 billion in government support by 2015.
Musk’s Broader Focus
Musk’s public focus on subsidies and tax credits is overshadowed by his frequent commentary on various political issues. His social media activity reveals opinions on topics ranging from transgender children in public schools to immigration policies.
Musk has reportedly discussed taking a formal role in immigration policy with Trump, though he denies these claims. His endorsement of Trump marks the culmination of growing ties with the GOP. Musk first appeared at a Republican fundraiser in 2022, and he has been critical of President Biden since he took office, partly due to Biden’s early focus on EV efforts by Tesla’s competitors.
Responding to criticism about Biden’s past support for GM over Tesla, Musk said, “I try not to start fights, but I do finish them.”
