Where Trump and Musk don’t agree
The EV divide
(Credit: AP/Tesla)
The calling card for the new administration may be borrowed from Silicon Valley- “move fast and break things.” There is no shortage of stories about the early actions of the new occupant of the White House and the head of his Department of Government Efficiency. Despite all the fawning between Donald Trump and Elon Musk, the men are not talking about, nor acknowledging, their dramatic differences on part of the transportation transformation.
Musk’s Tesla is one of the largest electric vehicle (EV) manufacturers in the world. The Tesla CEO has championed and advocated for solar power and EVs. His aim with Tesla is to, “accelerate the advent of sustainable transport by bringing compelling mass-market electric cars to market.”
Musk has done that. Over the past few years the market value of his company has been more than the “big three” automakers combined. Tesla has used government subsidies to grow its market share in the U.S., even though the CEO has himself railed against them. He’s against them, but he will use them. In fact, on a recent podcast conservative economist Oren Cass called Musk, “literally humanity’s greatest subsidy farmer.”
While Trump heaps praise on Musk, he doesn’t seem to like the EV business much and is trying to at least slow, if not stop, the industry. Trump appears to believe he can help auto industry workers by promoting internal combustion engines (ICE). Those workers are also building EVs.
“Drill baby drill,” is the President’s mantra to, “unleash,” American fossil fuels to solve what he calls, “a national energy emergency.” “Our Nation’s inadequate energy supply and infrastructure causes and makes worse the high energy prices that devastate Americans,” says a Presidential Executive Order.
The U.S. does face the potential of electricity shortages in the next decade, especially considering new demands of artificial intelligence (AI) data centers. But Trump is really talking about oil and gas. There is no emergency. The U.S. has produced more oil and gas than it needs for the past several years.
But back to EVs and the unspoken division between these two men. While Musk was “unleashed” on his quest to find, “waste, fraud, and abuse,” in the Federal government, Trump was busy with executive orders to promote the oil industry and remove incentives for the EV industry. All administrations get to make choices and Trump’s decisions may actually hurt his MAGA base more than his opponents’ (more on that a bit later).
The President’s executive order (EO) proclaimed it would, “eliminate the ‘electric vehicle (EV) mandate.’” There is no mandate that Americans must buy an EV. The Biden administration did initiate several efforts to encourage consumers to shift from ICE vehicles to EVs. The new administration has targeted two of those major Biden initiatives.
The Trump EO The CAFE (Corporate Average Fuel Economy) standards require an auto company to hit a specific level of fuel economy for its entire fleet.
The Biden administration raised CAFE even more. That made it difficult for automakers to meet the requirements with an all-ICE product line. The Democrats saw this as a way to push the automakers to move into EVs for part of their fleet. Perhaps this is what the new administration refers to as the, “EV mandate.”
The automakers in the U.S. appear committed to the transition to EVs. They say it’s good for their business. So, the CAFE changes (promised by the new administration) may not change the carmakers’ plans (EV sales are growing, but not at predicted levels).
The second effort by the new administration could have more serious affects on the carmaker’s EV business, and red states that may want to convert from ICE to EVs.
That’s the next post coming soon.
I don't disagree that the Oil lobby is happy with "drill baby drill." Fewer regulations and easier permitting make sense for CEOs in that industry. But, economically it is a bad time to drill. It would only drive prices lower. Certainly, the oil industry is happy to have a friend in the White House. However, I would not expect a rush to drill by the industry.
I often comment on people/voters taking action against their own best self interest. I agree Musk is not helping Tesla with some of his efforts. Second piece just posted!