One big thing Donald Trump and Elon Musk have in common
They both want to crush Tesla’s competition
Summoning a giant flaming rocket safely home from the edge of space is pretty cool, but Elon Musk’s success in yanking the infamously inertial American car industry in a new direction still ranks among his most impressive achievements. Believing that a transition to sustainable energy was essential to preserving humanity, Mr Musk set out to make Tesla “a guiding light” that would lead other automakers to electrify their cars years before they might have otherwise. The strategy began working almost right away. In 2009, the year after Tesla delivered its first production car, the Roadster, Bob Lutz, a General Motors vice-chairman and a convert to electrification, called Tesla “the crowbar that helped break up the logjam”.
Among the puzzling aspects of Mr Musk’s devotion to electing Donald Trump is that the former president considers this achievement a historic mistake. “The electrics are just not going to work,” Mr Trump told the Detroit Economic Club on October 10th. “The entire industry will go to China for the making of these all-electric cars and trucks. The auto industry would be non-existent.”
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In fairness, Mr Trump sometimes says things he does not mean. (“He’s the world’s champion of bullshit,” Mr Musk once observed to his biographer, Walter Isaacson.) And sometimes what Mr Trump says does not mean much. (“He seems kind of nuts,” Mr Musk said after meeting Mr Trump in 2016.) These seeming deficiencies—which, as Mr Trump has amply proved over the past eight years, are actually among his core strengths—tend to be on vivid display when he talks about the car business.
“By the time I came into office after our victory in 2016, the Michigan auto industry was on its knees begging for help, gasping,” Mr Trump told the Economic Club. “It was all gone.” In fact, the “big three” automakers had a banner year in 2016 amid record sales in America of 17.5m vehicles. In the same speech, Mr Trump warned that without him in power the industry was again “going out of business” and its workers were living in a “nightmare”. In fact, the big three are making record profit-sharing payments to hourly workers. (On the nonsense front, he described watching Mr Musk’s rocket boosters land: “They’re coming down very slowly, landing on a raft in the middle of the ocean someplace with a circle. Boom. Reminded me of the Biden circles that he used to have, right? He’d have eight circles and he couldn’t fill them up. But then I heard he beat us with the popular vote.”)
As Mr Trump rattled on about how his “hair would be waving” in his Pontiac GTO during the industry’s “glory days”, he sounded a bit out of date. Chad Livengood, the political editor of the Detroit News, has come to think Mr Trump has a “1978 Cadillac Eldorado view of the auto industry”, as though “everybody is still driving big bulky V8 sedans” and an American electric-vehicle company, Tesla, is not the most valuable carmaker in the world. And yet, Mr Livengood adds, “To give him credit, he put his thumb on an issue, a sore really, and he kept pressing down on it.”
That sore spot is the anxiety in the industry and among consumers over the transition to electric vehicles. The industry has weathered existential challenges before. With varying levels of federal and foreign help, the big three ultimately made the shifts to greater fuel efficiency in the 1970s and 1980s and to lean manufacturing in the 1990s and 2000s. But neither of those transitions matched the complexity of the one now underway.
Despite a federal tax credit of up to $7,500 and price cuts, electric vehicles are piling up on dealers’ lots, and the Biden administration is struggling to build the charging network envisaged by the 2021 infrastructure law. So far, the $7.5bn federal investment has yielded just 19 stations in nine states, though the pace is accelerating, according to Atlas Public Policy, a consultancy. Even Mr Musk has been cutting prices as he confronts new competition at home and abroad. Tesla finds itself vying for global sales leadership in EVs with BYD, a Chinese firm, and losing market share in America as dozens of new models go on sale.
Mr Trump is gaining share in the Midwest by claiming that Vice-President Kamala Harris, the Democratic nominee, wants to force people into electric cars. Ms Harris insists she “will never tell you what kind of car you have to drive”. But when she ran for president in 2019, Ms Harris supported a mandate that all new vehicles sold to be zero-emission by 2035, and the Biden administration’s emissions standards in effect mean that, by 2032, 56% of new vehicles sold would have to be electric—a goal that seems more fanciful by the day. To buy the Americans time to build share in the market, President Joe Biden raised the tariffs that Mr Trump imposed on Chinese electric vehicles, from 25% to 100%.
The fast and the spurious
Besides ending the “insane electric-vehicle mandate”, Mr Trump has called for doubling those tariffs and rewriting America’s trade deal with Mexico to impose tariffs of up to 1,000% on Chinese electric vehicles made in plants there. “They might as well stop building the damn plants,” he said in Detroit. And yet as he seeks to protect Americans from buying Chinese electric cars, he is claiming Americans won’t buy EVs anyway and urging American automakers to give up making them. It’s like saying Chinese golfers can’t play one of his courses because no one else will, then turning the place into a launching pad for zeppelins.
Mr Musk no doubt has his reasons to support Mr Trump. Mr Biden snubbed him because his plants are not unionised, and Mr Musk’s contempt for the “woke mind virus” seems deeply felt. Yet it is also a happy coincidence that, when it comes to EVs, Mr Trump’s eccentric mix of protectionism and defeatism would stifle competition for the great insurgent American car company that, to Mr Musk’s profound credit, has become the incumbent.
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