Donald Trump Victory Is a Setback for the CEO of Tesla, Elon Musk
A Donald Trump victory could be a major setback for the clean energy industry, which could be a big setback for the CEO of the electric car maker Tesla Motors Inc (NASDAQ: TSLA), Elon Musk.
Shares of Tesla stock plunged around three percent in early trades after the news of Trump’s victory stunned clean-energy investors. The fall of Tesla stock does not come as a surprise, as the Trump win implies triumph of his radical geopolitical views, on issues ranging from climate change to energy policies.
Trump plans to undo a global deal signed last year by world powers in Paris and cancel billions of dollars in climate-change spending for the United Nations program. He plans to employ this fund for American infrastructure projects instead.
In a political rally, Trump pledged, “We’re going to put America first. That includes cancelling billions in climate change spending for the United Nations, a number Hillary wants to increase, and instead use that money to provide for American infrastructure including clean water, clean air and safety.” (Source: “Trump Says Plan to End Climate Spending Would Save $100B,” Bloomberg, November 2, 2016.)
There is another catch, as Musk made a controversial remark that Trump is not the right guy to lead the United States of America during a media interview. “I feel a bit stronger that he is probably not the right guy,” said Musk. “He doesn’t seem to have the sort of character that reflects well on the United States.” (Source: “Elon Musk on Trump presidency: ‘I don’t think he’s the right guy’,” Business Insider, November 5, 2016.)
This statement might prove costly to Tesla, as Trump can turn hostile.
Tesla stock had gained last week following its decision to end free charging in 2017 and charge small fees to its customers at its “Supercharger” stations. The electric car maker did not disclose the amount that it will charge at its “Supercharger” stations except that the fee will be charged incrementally, and will be lower than the price of gas.
The move comes ahead of the launch of the “Model 3” sedan, which Musk says will help increase the company’s production to 500,000 vehicles in 2018, from about 50,000 last year. The company stated that it has 373,000 reservations for the Model 3. At the end of Q3, the company had 715 Supercharger locations globally, with 4,461 individual Superchargers.
At present, President-elect Donald Trump is yet to unveil his policy concerning climate change. Until then, investors would have to watch out for the fine print.