Elon Musk bites the hand that fed him by beating California and Democrats

In the weeks since Tesla CEO Elon Musk began his maneuvering to get Twitter, he’s become comfortable expressing partisan political views — usually on his liking social media platform — including insults directed at California, President Joe Biden and “libs.” “. Musk is now planning to vote Republican, he says — and join a party he once derided as a “friendly capitalist” who profited from Democratic politics but now sees him as an ally.

“California used to be the land of opportunity, and it’s a beautiful state,” Musk said during his video appearance at the All In Summit in Miami this week. Then he listed the factors he says would now make it impossible to build a plant in the Golden State like Tesla’s new gigantic Giga Texas plant in Austin. “California has moved from a land of opportunity to a land of taxation, overregulation, and litigation,” the Tesla CEO added. “This is not a good situation, and in fact, there should be serious pipe cleaning in California.”

For years, as Musk built Tesla from a startup into the world’s dominant electric car company, he courted Democrats in California, where most Tesla customers live, and nationally. He and his company have benefited from party politics and environmental priorities — particularly electric vehicle subsidies — that have helped grow Tesla’s customer base. In recent months, before and after his pursuit of Twitter began, Musk appeared to be veering to the right — for example, crossing swords with Democratic Senators Bernie Sanders and Elizabeth Warren over their proposals to raise taxes on billionaires and swearing at Biden for not being included in White House EV events. .

Last year, Musk moved Tesla’s headquarters to Texas from Silicon Valley (and his residence in Austin from Los Angeles) to take advantage of lower taxes, a lower cost of living, and a more relaxed regulatory environment. Since then, his rhetoric has veered more specifically toward the conservative side, culminating in a tweet yesterday in which he announced his intention to vote for Republican politicians moving forward.

“In the past I voted for the Democrats, because they (mostly) were the party of kindness,” he tweeted Wednesday after excluding Tesla from S&P’s ESG index. “But they have become the party of division and hate, so I can no longer support them and I will vote Republican.”

The California bashing of a naturalized American Musk, who is the richest person in the world based on his stakes in Tesla and SpaceX, is noteworthy in part because his home state is still by far the best market for Tesla electric cars in North America. It’s also controversial whether the company can survive its rocky early years without California’s zero-emissions vehicle program, which created an opportunity for Tesla to sell emissions credits to other automakers that has generated billions of dollars in free revenue over the years. (Tesla’s Fremont, California plant, originally a gift from Toyota in 2010, was also hugely beneficial.)

“No one has ever accused Elon Musk of gratitude — or even a sense of proportion,” says Mary Nichols, the former president of the powerful California Air Resources Board, which crafted the ZEV program and championed Tesla as it evolved from a startup to a large-scale manufacturer. “He certainly wouldn’t be where he is without ZEV’s mandate and the money he got from selling his credits to other OEMs.”

No one has ever accused Elon Musk of gratitude – or even a sense of proportion.

Mary Nichols, former president of the California Air Resources Council

Musk wouldn’t explain why he now sees the Republicans as kinder than the rival party that helped Tesla get started. Although the Republican Party welcomed his newfound loyalty by using it immediately for fundraising. Musk has repeated conservative talking points about “awakening progressive radicals” and “possessing sorcery” on Twitter in recent weeks — along with lewd jokes about transgender people and his opposition to a plastic straw ban intended to help the environment.

Some conservatives have welcomed the billionaire’s assertion that he will invite former President Donald Trump back to Twitter after he banned comments supportive of the January 6 uprising and lies about the 2020 election. Likewise, Musk’s intent to make the platform welcome controversial views in pursuit of an absolute vision of free speech has boosted his popularity among politicians and commentators. The outspoken, including Representatives Marjorie Taylor Green, Matt Gaetz and Fox News’ Tucker Carlson.

Green tweeted on April 25: “Get ready for the complete breakdown of the blue check mark after melonmusk closes the deal and will get my personal Twitter account back.”

Texas is the capital of America’s oil and gas industry and is not synonymous with the clean-tech endeavors that Musk is associated with, but he praised its greater resilience, compared to California, this week. The Lone Star state’s further shift to the political right — including tough new policies on abortion, treatment of transgender youth and voting rights, while relaxing rules on gun ownership — does not bother Musk, according to Governor Greg Abbott.

“Elon had to get out of California because it’s part of California’s social policy,” Abbott told CNBC last year, noting that he talks with Musk a lot. “Elon constantly tells me that he loves the social policies of Texas.”

When asked if his more polarizing views could hurt Tesla’s image with some consumers, Musk wasn’t alarmed. “I’m confident we’ll be able to sell all the cars we can make,” he said this month at the Financial Times conference. “Currently, the lead time for a Tesla order is very long, so our problem is not demand, it’s production.”

Ed Kim, an auto industry analyst, says his newfound conservative approach carries risks and potential positives for Tesla.

“Conventional wisdom says it generally makes sense for CEOs to shy away from regularly articulating their policies, but Tesla has always broken conventional wisdom in almost every way,” says Kim, president of AutoPacific, an industry consultant in Santa Ana, California. “As electric cars continue to thrive and spread away from the liberal, traditionally electric car-friendly shores, Musk’s continued statements of his policies could boost his popularity as well as that of Tesla in more traditionally conservative parts of the country.”

Musk’s frustration with Biden stems from the president’s failure to refer to Tesla when praising the efforts of American manufacturers such as General Motors and Ford to speed up production and sales of electric cars. The White House also excluded Musk from meetings with US CEOs to discuss battery technology and electric vehicles, although Biden acknowledged that Tesla is a leader in electric vehicles at a brief conference in February on charging infrastructure.

Conventional wisdom says it generally makes sense for CEOs to shy away from regularly articulating their policies, but Tesla has always broken conventional wisdom in almost every way.

Ed Kim, President of AutoPacific

But it was the Obama and Biden administration that helped, like California, get Tesla off the ground. The Department of Energy granted Tesla a $465 million low-interest loan in January 2010 that allowed the company to set up its Fremont plant to start production by 2012. Although it proved a good investment by the United States, Tesla repaid the loan with interest many years ahead of schedule in 2013 – Republican presidential candidate Mitt Romney derided support from a Democratic administration as “crony capitalism.”

“When government routinely picks winners and losers, companies cannot predict their prospects, and free enterprise is replaced by crony capitalism,” Romney said in a March 2012 speech in Santa Barbara, California. “Solyndra, Ener1, Fisker, and Tesla are examples of this.”

Three of the four companies referred to in Romney ended in bankruptcy (although Fisker returned with a new EV startup), but Tesla has become the world’s most valuable automaker and largest seller of electric vehicles.

Nichols, currently a visiting fellow at Columbia University’s Center for Global Energy Policy, said that regardless of Musk’s comments, she’s pleased with California’s impact on Tesla.

“I own a Tesla Model 3 and will always be proud that our regulations made him the (probably) richest man in the world while urging others to move more aggressively in the age of electric transportation.”

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