MUSK’S DANCE WITH TRUMP
Many wonder what he stands to gain from ‘weird’ bromance
On Friday, Elon Musk will complete a journey almost as improbable as his vaunted quest for Mars.
In attending President Trump’s first business advisory council meeting, the South African-born, self-made billionaire who is bent on saving the world from global warming will have become a counselor to a New York real estate mogul-turned-president who is eager to bring back the age of coal.
The move has many Musk-watchers scratching their heads, given he had not supported candidate Trump.
“Elon has always been very opportunistic,” says Ashlee Vance, whose Elon Musk: Tesla, SpaceX and the Quest for a
Fantastic Future chronicles the entrepreneur’s driven path from Africa to Canada to the U.S. “But still, this is weird.”
The opportunities are many, as are the risks.
As chief executive officer of companies that compete in the heavily regulated arenas of aerospace (SpaceX), automotive (Tesla) and energy (SolarCity), Musk, 45, can try to parlay his Trump connection into smoothing regulatory bumps and accessing federal funding as he expands his ventures.
In particular, Musk would appear to be on the brink of bringing sleek electric cars to the masses with his entry-level Model 3 sedan, whose success is key to Tesla becoming profitable and justifying the steep run in its shares. He’s hoping to start an alt-energy revolu-
“They’re both grandmaster-level salespeople and these two very much larger-than-life figures.” Peter Thiel, Elon Musk’s longtime friend and PayPal co-founder
tion with a SolarCity acquisition that could find him peddling affordable solar panels and electricity storage devices, an ambition that would benefit from policies such as a carbon tax that penalizes fossil-fuel generation.
Another possible benefit of Musk having ties to the administration would be ground-floor access at the start of any new lunar mission.
Trump, in turn, gets to associate himself with an industry maverick — a disruptor like the political outsider the president has styled himself — who is opening factories and expanding U.S.based jobs. Musk’s SolarCity and Tesla efforts are slated to employ tens of thousands in factories on both coasts.
But plenty of pitfalls exist for Musk as he tries to navigate these political waters.
While Trump may personally find himself drawn to a CEO who likes to speak and tweet in declarative statements — Musk once blasted Apple as a “graveyard” for failed Tesla engineers — the president is surrounded by powerful counselors who may have the final word.
Last week’s seven-nation majority-Muslim immigration ban, which prompted protests nationwide, was the work of advisers Steve Bannon and Stephen Miller, according to Newsweek. That suggests they or others could steer Trump clear of pro-Tesla or SpaceX decisions should they determine them to be not in the best interests of Trump’s base.
Musk may appeal to Trump’s professed love of American ingenuity, but Tesla and SolarCity have an elitist sheen that could spell disaster. Trump appears to be clearing the way for less regulation in the oil and gas industries, which wouldn’t be a boon to an electricity enthusiast.
What’s more, if anything happened to today’s federal tax incentives on electric cars, Musk could find that his wares cost $7,500 more overnight, no small matter on the $35,000 Model 3.
And another potential pothole looms for Musk, one that’s already dinged another tech company in talks with the White House.
In agreeing to broadly advise the new administration — Musk is on Friday’s Strategy and Policy Forum council along with CEOs from Pepsi, General Motors and JP MorganChase, and he’s part of a group focused on manufacturing — there exists the potential brand blowback that Uber experienced this week.
When New York taxis last weekend stopped operating to support protesters at JFK over Trump’s Muslim immigration ban, Uber continued to operate. That stand created a backlash on social media named #deleteUber, and competitor Lyft saw its app overtake Uber on the Apple App Store.
Uber CEO Travis Kalanick also came under fire from drivers, who urged him to quit his position on Trump’s advisory council. On Thursday afternoon, Kalanick did just that.
Although Tesla stock is up nearly 40% since December, the company did start to see some consumers canceling their $1,000 deposits for the company’s upcoming entry-level Model 3 sedan, according to auto site Electrek.
“Kills me as a TSLA fan but need to take a stand,” tweeted Colin Niloc, who decided to donate his deposit to charity.
Musk came out against the controversial immigration ban on Twitter in relatively muted language and suggested his 7 million followers use him as a vehicle for change. “Please read immigration order. Lmk (let me know) specific amendments. Will seek advisory council consensus & present to President,” he tweeted.
That didn’t mollify some tech leaders. Facebook’s head of artificial intelligence tweeted at Musk in blunt terms: “You are an advisor to Trump. Quit. If you stay, fight and know that this will hurt your legacy regardless.”
In a recent Twitter exchange with Gizmodo, Musk suggested that his decision to engage with the new administration was out of a belief that it would yield better results than a battle.
“The more voices of reason that the President hears, the better,” he wrote. “Simply attacking him will achieve nothing. Are you aware of a single case where Trump bowed to protests or media attacks? Better that there are open channels of communication.”
Musk biographer Vance says that despite the liberal nature of Tesla’s green energy agenda, the boss ultimately knows that reaching his business goals — whether ridding the planet of carbon monoxide emissions or colonizing Mars — is integral to that personal legacy.
“Elon is always the underdog, which means he’s in self-preservation mode with his companies,” says Vance, who notes that despite Musk’s outsized personality (another similarity to the 45th president), the success of his companies is by no means guaranteed.
For instance, SolarCity is battling energy companies that are deep-pocketed donors of congressional leaders. In aerospace, SpaceX is fighting the entrenched practice of the U.S. awarding aerospace contracts Lockheed Martin and Boeing partnership.
In his access to Trump and Trump adviser Peter Thiel, who like Musk made a fortune starting PayPal, Musk has a chance to get the new administration on his side. But it’s not a given the gambit will win.
Thiel told The New York Times, “They’re both grandmaster-level salespeople and these two very much larger-than-life figures.”