One big thing Donald Trump and Elon Musk have in common
- by The Economist
- Oct 17, 2024
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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 under way.
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
EV
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