Trump’s Tesla Love Affair: A Win for Elon, a Loss for the EV Industry?

about 1 month ago (Edited)

Elon Musk’s Political Influence Grows Under Trump’s Administration

Elon Musk has become a prominent figure in President Trump's administration, serving as a key donor during Trump's presidential campaign. His close affiliation with Trump is evident, as he now oversees the Department of Government Efficiency (DOGE), exploring cost-cutting measures for the administration.

I have written a humorous article on Elon's name selection for the Department he heads; DOGE here. Do give it a read!

Meme-Flavored Post: Elon Musk Has a Crypto Pet

Criticism Mounts as Elon Wields Influence Over Federal Funding

However, Elon's political involvement through DOGE, has drawn criticism, as he uses his position to cut funding to federal agencies and humanitarian Organizations!

Tesla in news spotlight as TSLA share prices fall noticeably!

At the time of writing, one of his flagship companies, Tesla has been in the news lately as its TSLA stock has experienced deep price declines.

Trump’s election victory euphoria caused TSLA to boom from 250$ range in November to 465$ peak range in December, post which TSLA price has been declining.

Now, TSLA has declined by over 50% from its December peak, shedding off all those election victory price gains & come to the 248$ price point!

Tradingview Chart>>

Visible unpopularity of Elon with Tesla boycott sentiments around US!

One major reason for TSLA’s decline is investor disappointment as Tesla’s car sales are declining globally now – in Europe, China and even Tesla's base US!

It’s pretty obvious that Tesla car sales would keep declining globally due to this Tariff war phenomenon, where countries ready to fight this Tariff war with US would not hesitate to hike up Tesla car prices adding reciprocal tariffs.

There are many other EV cars available at a lower price, with China leading here as well.

So Tesla has competition! All good for customers, for Electric cars would be available to purchase at lower prices now.

There have been Take Down Tesla movements around the US , outside Tesla dealership outlets in Portland, Oregon and some other parts of US. These are protestors making boycott Tesla calls.

All this is a consequence of Elon very close association with US politics, with some sections unhappy with Trump’s Tariff announcement news, that definitely brought about uncertinity in the US Market, with US indices making news with valuation declines, with shares of automobile manufacturing companies too declining.

Tariff Turmoil: Unpacking Trump’s Economic Chess Game

This is because US imports car component parts from other countries – Mexico, China and raising tariffs in these countries would lead to increased cost of cars manufactured by US companies as well. This means increased car costs for those US citizens as well who choose to buy American-made cars.

Trump’s Tesla Endorsement with his Tesla purchase made within the Whitehouse premises!

However, Elon Musk has President Donald Trump’s back which Trump demonstrated recently in Whitehouse, where the US president purchased a Tesla car, S model, red color at price of $80,000.

He selected that car, out of other Tesla cars showcased outside the lawns of the Whitehouse!

This Tesla car Trump has announced would be used by his staff!

Trump’s Policies: A Blow to the EV Market

President Trump may have succeeded in advertising Tesla car as his purchase made news, but his policies, ironically, harm the electric vehicle market, EV market segment.

We all know that President Trump is all ok with petroleum cars, his Government is not committed to cut emission rates to curb global warming.

One of the January executive orders President Trump signed had done away with customers getting tax credits for purchasing electric vehicles.

Trump had annulled an executive order signed by his predecessor, ex-president Joe Biden, that stated that by 2030 half the new cars produced by American car industry would be electric!

Trump's unsupportive attitude towards the EV industry also is a cause for decline in demand for Electric vehicles, as there are extended deadlines for phasing out emissions now. Production of EV vehicles will automatically decline adjusting to market requirements. There will remain good demand for hybrid cars, petroleum cars, and AI cars are making inroads as taxis.

Elon’s Paradox: Praising Trump While EV Industry Suffers

Inspite, market fundamentals now showing the declining need for increasing production of EV cars, Elon Musk who was alongside President Trump when he purchased Tesla, said he would double production and volume in the next 2 years, and praised Great policies of President Trump!

Elon Musk had also promoted President Trump’s key slogan wearing a baseball cap with caption “Make America Great Again!”

News is around that Elon is focusing on bringing down prices of Tesla cars and planning to sell AI powered self-driven taxis.

Elon and Trump: A Power Duo Reshaping America?

With Trump and Elon, there is no shortage of breaking news.

I always remember this ‘Pinky and the Brain’ cartoon theme song when I think about Elon's partnership with president Trump these days. He had a game plan to come into politics, which is why he bought twitter on December 2022.

Trump promotion campaign by Elon on X( which even reached me) provably was also an important factor through which Donald Trump influenced US voters and won election!

Elon's plan was to take over America atleast for a start by becoming President Donald Trump's ally and from here he must be designing schemes to make America very great!

Let’s enjoy Pinky and the Brain theme song and the upcoming weekday forks!