There has been much consternation among the Tesla fan base about Elon Musk’s recent alignment with the Trump administration. This article makes a case that Musk actually has to become a voice of council for the new President if Tesla is to remain at the forefront of the EV and energy systems sectors. Here are 10 reasons why.
Tesla has always been a disrupting force.
Tesla’s business strategies have always been outside the mainstream. Their first vehicle on the market, the Model S, was a high end automotive model rather than a basic, entry-level vehicle. They redesigned what a car was all about so that it integrated software and hardware. They challenged the distribution model and provide their own retail showrooms in place of dealerships. To continue on the forefront of technology innovation and disruption, Elon Musk needs to be part of conversations like those with Trump, distasteful as they may sometimes be.
U.S. manufacturing job creation goals benefit both sides.
Starting from a position of strong design and technology, Tesla has worked toward the goal of reliable and timely manufacturing. “We take it very seriously, and we need to solve it if we’re going to scale and scale rapidly,” Musk said. One way of solving Tesla’s manufacturing needs was to hire the “best manufacturing people in the world” to join Tesla so they would become “super good at making large complex objects.” Job growth as policy has been a consistent U.S. executive branch goal, and Trump would like to be able to say that he created as many jobs as his nemesis, Bill Clinton, who created the most number of jobs per capita — 21.5 million —during his term. Musk can help.
Clean energy can surely use the government’s nod of approval.
Although electric cars are “clean” because they emit no exhaust pollution, they still have a carbon footprint since the electricity that powers them is largely centralized and generated from fossil fuels. Musk intends to reframe how people acquire electricity. Through the installation of solar panels on houses through sister organization, SolarCity, Tesla will be able to help residential homeowners to decentralize electricity generation, which SolarCity acknowledges. “Federal, state and local governments offer incredible solar energy tax credits and rebates to encourage homeowners to switch to renewable energy to lower their energy usage and switch to solar power.” A happy SolarCity/ executive branch relationship can support solar rebates and promote solar roofs across the U.S.
Regulations can help or hurt a business.
As example of how regulations can affect Tesla’s business plans, all one need to do is look to Musk’s vision around cars being autonomous. “All you will need to do is get in and tell your car where to go,” Musk said in October. Unlike typical automakers who test with qualified drivers in controlled environments, Tesla gathers data through its customers via software called Shadow Mode, comparing a human driver’s actions to that of a computer. Self-driving cars require state approvals; Michigan became the first state to to approve self-driving cars back in December. A Trump nod to other states who are shuffling their administrative feet can help accelerate self-driving ubiquity.
Federal government nods may help Tesla’s future business expansions.
Among the variety of business expansions on Tesla’s drawing table are transformations in mass transit with a self-driving bus and goods transportation with a Tesla semi. With issues of relaying, battery swapping, and electrification to be solved for these concepts to be viable, Tesla needs to keep a good relationship with the U.S. government. Needs to raise capital, such as was sought for the Model 3 and Gigafactory in August, 2016, require regulatory filings with the U.S. Securities and Exchange Commission. Last year, SpaceX received help from the Pentagon to develop a new rocket engine. The government/ business connection is always looming behind Tesla expansion plans.
He can boost the company’s visibility through the councils.
It doesn’t hurt to see the Tesla brand name in the news as Trump promotes his relationships with the business sector. Every time that Trump promotes his Strategic and Policy Forum or his manufacturing council, Musk and Tesla receive news headlines. That publicity only helps the Tesla business model to thrive, even if it’s sometimes from disgruntled progressives.
Elon Musk can advocate for change from within circles of influence.
Successful businesses have a vital role in advocating and lobbying with each level of government to gain the greatest benefits possible. They hope to find common ground on policy proposals most favorable to their business plans. Tesla’s work with governmental agencies provides a forum for developing and organizing company ideas, which can then grow and flourish. For example, Trump may become interested in Mars missions through Musk’s influence.
Businesses rely on favorable government policies.
Tesla has quickly become an automaker, an energy company, the builder of a massive battery factory in Nevada, and a solar company through its merger with SolarCity. The Master Plan Deux is here at hand. A Trump White House and executive branch seems at this writing not to be receptive to Musk’s social justice vision of breaking the ties with the fossil-fuel era. It remains to seen whether federal incentives to support electric cars will continue under Trump or whether clean-energy initiatives endorsed by President Barack Obama will continue
Keep your friends close and your enemies closer.
The closer an enemy is, the more intimately we come to know their strengths, weaknesses, and patterns of behavior. We can use these understandings to our advantage. If Musk keeps Trump close to his ear, he is less likely to be found outside favorable federal policies. Moreover, as someone who Musk did not support during the 2016 elections, Trump’s positions, which likely engender Musk’s animosity and opposition, such as the recent anti-Muslim executive order, force Musk to rise up publicly against blatant social grievances.
The Trump effect can assuage stock market volatility.
Tesla has always been a volatile stock with wild swings the norm. That hypervolatility settled down somewhat in 2016, but Tesla will be pressed in 2017 to meet Model 3 production delivery goals and integrate the SolarCity financial element. The Trump effect can mitigate some of that market uncertainty, even if it requires Elon Musk to maintain a calm exterior composure while his insides are roiling.