Elon Musk hates subsidies, wants them gone. Tesla wouldn't be here had it not been for US govt aid

Elon Musk, the founder and CEO of Tesla, recently made headlines by endorsing Donald Trump for president. This endorsement raised eyebrows because it aligns Musk with a candidate who is openly critical of electric vehicles (EVs) and the subsidies that have been instrumental in Tesla’s growth.

Trump has promised to “end the electric vehicle mandate” and reduce subsidies, which are policies that have significantly benefited Tesla. Despite Musk’s support for Trump and his increasingly Republican rhetoric, Tesla continues to lobby for government benefits traditionally championed by the Democratic Party.

Tesla’s Relationship with government subsidies
Musk’s stance on subsidies is complex. Publicly, he has often criticized government intervention, yet Tesla has thrived largely due to government support. For example, Tesla’s first major manufacturing facility in Fremont, California, was established with the help of a $465 million loan from the US Department of Energy.

The company has also profited from nearly $9 billion in regulatory credits since 2018. These credits, awarded by federal and state governments to manufacturers who exceed emissions standards, can be sold to other automakers, providing Tesla with a significant revenue stream.

Despite Musk’s growing alignment with Trump, Tesla continues to advocate for policies that contradict the former president’s stance. In a February filing with the Environmental Protection Agency (EPA), Tesla urged the Biden administration to allow California to enforce stricter vehicle emissions rules than the rest of the country.

This request is in direct opposition to Trump’s position. Furthermore, Tesla has lobbied for regulations that would ban the production of most new gasoline-powered cars by 2035, a measure Trump and other Republicans have criticized.

Tesla’s continued dependence on government support
Tesla’s reliance on government support and subsidies remains evident. The company continues to lobby for stricter emissions regulations, which not only support environmental goals but also increase the value of the regulatory credits Tesla sells to other automakers. In the last quarter alone, these credits generated $890 million for Tesla, contributing to a net income of $1.5 billion.

Musk’s political moves have sparked concern among some Tesla shareholders. Ross Gerber, an investor with a significant stake in Tesla, argued that Musk’s support for Trump is contrary to the interests of Tesla and its mission to promote clean energy.

However, former Tesla employees involved in public policy efforts describe Musk’s approach as a balance between ideology and pragmatism. They argue that while Musk may oppose subsidies in principle, it would be unwise for Tesla to reject available financial support.

What’s behind Musk’s politics?
Musk’s approach to subsidies and government support can be seen as pragmatic. According to insiders, while Musk ideologically opposes government intervention, he recognizes the practicality of accepting public money when it’s available. This pragmatism extends to his support for Trump, which may seem contradictory given Trump’s opposition to policies that benefit Tesla.

However, Musk’s ambitions extend beyond Tesla, encompassing sectors like artificial intelligence, space exploration, and neuroscience. As a result, Musk may be willing to sacrifice some of Tesla’s short-term interests to align with broader, long-term goals.

The relationship between Musk and Trump has grown closer, with Musk scheduled to interview Trump on his social media platform, X. Musk’s endorsement of Trump has solidified in recent months, even as he continues to advocate for policies that contradict Trump’s views on EVs.

For instance, Tesla’s July 2023 filing with the EPA called for an end to the manufacture of gasoline cars, arguing that such a measure is essential to addressing the climate crisis. Yet, Musk has downplayed the immediate risks of climate change, reflecting a nuanced and sometimes contradictory stance.