A bone-breaking battle is underway between players in the electric car and oil and gas markets. Tesla Motors Inc. (NASDAQ:TSLA) CEO Elon Musk has blasted fellow billionaires the Koch brothers for what seems to be their new project aimed at undermining the electric car market.
On Friday, Musk, who co-founded Tesla more than a decade ago, posted a one-word tweet—“sigh”—followed by a link to a recent report published by The Huffington Post about the Koch brothers’ new major lobbying efforts to promote fossil fuels and attack subsidies for electric vehicles. (Source: “The Kochs Are Plotting A Multimillion-Dollar Assault On Electric Vehicles,” The Huffington Post, February 18, 2016.)
— Elon Musk (@elonmusk) February 19, 2016
The lobbying group, which has not been announced, would likely spend $10.0 million a year, The Huffington Post reported, citing unidentified industry sources. Koch Industries, controlled by the multibillionaire Koch brothers, will be the lead financier. Electric vehicles, which currently make up just one percent of the U.S. market share, benefit from billions of dollars in grants from the Barack Obama-led U.S. government administration. Consumers can also get a tax credit valued up to $7,500 if they purchase an eligible electric car. These credits, which are designed to encourage adoption of the technology, threaten the Koch brothers’ financial stake in oil and gas, as The Huffington Post points out. Some analysts predict electric vehicles will gain U.S. market share to as much as five percent by 2025. Furthermore, an insider quoted by The Huffington Post expects that electric vehicles could have “a substantial foothold in the U.S. market” in 20 years. Musk, who holds a 22% stake in the Palo Alto, California-based Tesla Motors company, argued in a second tweet that the petroleum industry has also been a big beneficiary of government subsidies.
Koch Industries dismissed Musk’s tweets.
“Koch Industries does not oppose electric vehicles,” The Washington Post quoted Philip Ellender, a spokesman for the company, as saying. “What we oppose is government subsidizing and mandating a particular form of energy over another. We oppose all subsidies—even for those industries in which we participate.” (Source: “Elon Musk’s snarky response to a Koch-brothers plan to kill electric cars,” The Washington Post, February 19, 2016.)
Koch Industries, the nation’s second-largest privately held corporation, is an energy and industrial conglomerate with $115 billion in annual revenue.
Tesla stock has lost 31% since the beginning of the year to close at $166.58 on Friday.