1 week Ago By Nick O'Malley
It was not that long ago that Elon Musk was globally viewed as a climate change hero, the man who, at the helm of Tesla, had almost single-handedly made electric cars sexy and scaled up production of the batteries that drive them. For those achievements alone, Musk’s declaration last year that “as the leader of the company, I’ve done more for the environment than any single human on earth” was not entirely absurd. Odd then that last month in conversation with Donald Trump on X, he was downplaying the threat.
Despite greater EV take-up globally, Tesla sales have slowed. Credit: Bloomberg via Getty Images Trump burbled during that interview that global warming would create more ocean-front property, while Musk fretted that if the carbon content of the atmosphere kept rising, sometime in the future, people might begin to suffer headaches and nausea. It was, wrote Bill McKibbon, one of the world’s best known writers on climate and the environment, “the dumbest climate conversation of all time.
” It was a remarkable moment because Elon Musk is clearly not a dumb man. Musk has previously demonstrated a sophisticated grasp of the science and urgency of the climate challenge. He long understood that while EVs would be a crucial tool in decarbonising transport, the batteries that drive them would become central to the entire transition to a clean economy.
Driving EV sales up meant driving down battery prices, he realised. “The overarching purpose of Tesla Motors (and the reason I am funding the company) is to help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution,” he wrote in a 2006 blog post recently purged from the Tesla website. When conservative critics sniggered that these batteries could not contribute to the world’s transition to a clean energy system, Musk took a bet with the Australian green tech investor, Mike Cannon-Brooks, and built the Hornsdale big battery in South Australia in less than 100 days in 2019.
Now, big batteries are being deployed across the world at an unimaginable speed. “The sector has seen tremendous growth, soaring 1,250% since the Hornsdale bet, from 770 million watts to 10 billion watts,” wrote Asma Aziz, senior lecturer in power engineering at Edith Cowan University in June. But even as battery deployment surges, EV sales have slowed, and some critics point out that the slowdown coincides with Musk’s embrace of a political movement that has been hostile to EVs and their early adopters.
Trump is a fossil fuel champion and has long campaigned on the slogan “Drill, baby, drill”. He has vowed to pull out of the Paris Agreement on climate, promises to rip up the Biden administration’s vast system of clean energy and EV-investment initiatives, and in a speech in March, declared the widespread adoption of electric cars would be a “bloodbath for the country.” Musk’s political pivot to Trump has come at a cost to his company.
Credit: AP Frustration at Musk among some of his early backers is now growing. One of the most high-profile is Ross Gerber, chief executive and co-founder of Gerber Kawasaki Wealth and Investment Management. Gerber bet big on Tesla before it became a stockmarket darling, but since Musk bought Twitter, rebranded it X, and became more deeply engaged in politics, Gerber has been dumping stock and criticising Musk for being distracted.
“Over time, I’ve just been sort of lowering my position because I just don’t have the same confidence that they’re going to achieve the goals that were set out for Tesla several years ago and even recently, which is really to sell more cars,” Gerber said during a recent interview with Yahoo Finance. He said he had cut his holdings by US$60 million to US$50 million. In the face of a share price that at the time was down 13 per cent over the year, he voiced scepticism about Musk’s focus on robotic and self-driving cars.
“That’s just a distraction from the fact that they need to sell cars this year, and next year, and the year after because none of this is coming anytime soon. “It’s really a quagmire where you have the best products in an industry but a CEO who doesn’t actually work there, who doesn’t try to sell the cars,” Gerber said, adding: “We’ve seen sales go down, and that’s what’s happening. Sales are going down.
If you’re expecting a great quarter, you’re wrong. “They’re not selling any Teslas here, other than basically, discount, discount, discount .” In July, just as the world was digesting Musk’s endorsement of Trump, Tesla reported that its second-quarter net income revenue was down almost 50 per cent.
The US social research outfit Civic Science published research showing that the brand’s favorability had fallen among all Americans but more markedly among Democrats. In April, the reputation monitoring group Calibre detected a significant fall in Tesla’s “consideration score” a key metric that measures the number of people considering buying the product in future. It had fallen from a high of 70 per cent in November 2021 to 31 per cent in February, Reuters reported .
“It’s very likely that Musk himself is contributing to the reputational downfall,” Caliber chief executive Shahar Silbershatz told Reuters, saying his company’s survey showed 83 per cent of Americans connect Musk with Tesla. ‘I’m for electric cars. I have to be because Elon endorsed me very strongly’.
Clearly it’s not possible to attribute industry headwinds to Musk’s politics. It is not just Tesla facing falls in sales. In Australia, the pure EV sector has seen a drop in sales of 19 per cent, while sales of hybrids have grown, says the chief executive of the Electric Vehicle Council of Australia, Samantha Johnson.
She attributes the slowdown to range anxiety and the fact that technology early adopters have already purchased electric cars. (The EV Council does not comment directly on its members.) On the upside, Donald Trump’s view of EVs appears to have undergone a significant change.
“I’m for electric cars. I have to be because Elon endorsed me very strongly,” Trump said at a rally last week in Georgia, where EV manufacturing has flourished with the support of Biden administration policies. “So I have no choice.
” And Musk has found a way to reconcile with Trump’s promise to strip his industry of those very policies. Scrapping the incentives would hurt Tesla “slightly” he reasoned during a recent earnings call, but in the long term it would probably help. Why? Because it would be devastating to his competitors.
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