Tesla's rival, Musk, took advantage of the Biden administration's unfavorable electric vehicle policy to rally support for Trump.
AInvestMonday, Jul 15, 2024 4:10 am ET
1min read
TSLA --

Elon Musk seems to be distancing himself from the Biden administration on electric vehicle policy. Tesla, the world’s largest electric vehicle manufacturer, should have been one of the biggest beneficiaries of the Biden administration’s “green transition” policy. However, Tesla has not benefited substantively from the Biden administration’s new energy policy. There may be a conflict of interest behind Musk’s move.

Dispute over energy policy deepens the divide

Musk, the top spokesperson for the new energy industry, has a clear disagreement with the Biden administration on the new energy vehicle policy. The Biden administration’s “Inflation Reduction Act” gives tax credits to electric vehicles assembled by unionized workers in North America, but most Tesla products are excluded. Moreover, Musk has been critical of the Biden administration’s strict new regulations on vehicle emissions. In contrast, Musk is more aligned with Trump on policies such as electric vehicles and traditional energy. Trump has openly stated that he will reverse the Biden administration’s electric vehicle policy. Musk’s choice to side with the Trump camp may be driven by the consideration of maximizing corporate interests.

Balance between short-term gains and long-term development

Behind his “full support for Trump,” Musk may be motivated by the pursuit of short-term gains. If Trump can regain power and implement his anti-electric vehicle energy policy, Tesla’s position in the US market will undoubtedly benefit. However, in the long run, Musk’s move may hinder the sustainable development of the new energy industry. Musk has already established a mature layout in the new energy field. It may be costly for him to short-sightedly and recklessly side with Trump. In the choice of energy policies, Musk may be caught in a dilemma between interests and values in the short term.

Overall, Musk’s series of moves reflect the difficult choices he has made to maximize corporate interests in the context of the growing political divide between the two parties in the US. Ultimately, it remains to be seen whether Musk can win in this power struggle.

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