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Tesla CEO Elon Musk
Elon Musk is being a hypocrite.On Thursday, Tesla's CEO tweeted that he's leaving White House advisory councils after President Trump said he would back out of the Paris climate accord.
"Climate change is real. Leaving Paris is not good for America or the world," Musk wrote on Twitter.
But Trump has promised to pull the US out of the Paris agreement since before he was elected - and Musk knew that when he joined the councils in the first place.
Musk might've hoped he could change Trump's view - and he and Secretary of State Rex Tillerson might've swayed Trump to implement a carbon tax.
His agenda in this was pretty transparent: Tesla's electric vehicles don't produce carbon, and anything that encourages people to turn to renewable energy would benefit the company - which is also making roof shingles that harness solar energy and battery packs that store it all.
And, as my colleague Matt Debord explained repeatedly this year, Musk felt that his role as a creator of manufacturing jobs in the US would've given him some sway over Trump.
It turns out, that on the issue of the Paris agreement at least, Trump was being serious about his intentions and a carbon tax certainly looks unlikely.
The thing is, Trump doesn't forgive. He holds grudges and that could spell bad news for Musk and Tesla.
Tesla receives a boatload of government money - which could include subsidies, grants and tax credits to customers who buy its electric cars.
According to a Los Angeles Times story from May 2015, Tesla receives $4.9 billion in "government support," and while a good portion of those are from states, there's no doubt the company benefits from federal handouts too.
"Since 2006, SolarCity has installed systems for 217,595 customers, according to a corporate filing," The Times wrote. "If each paid the current average price for a residential system - about $23,000, according to the Union of Concerned Scientists - the cost to the government would total about $1.5 billion, which would include the Treasury grants paid to SolarCity."
U.S. Senator Michael Bennet, D-Colo., center, helps as SolarCity employees Jarret Esposito, left, and Jake Torwatzky, install a solar panel on a home in south Denver.
Musk has downplayed this issue before. Seeking Alpha highlighted his comments on the matter at the company's most recent quarterly conference call, saying that Musk argued that the subsidies and credits help the competition more than they help Tesla:
"And I should perhaps touch again on this whole notion of - it's almost like over the years there's been all these sort of irritating articles like Tesla survives because of government subsidies and tax credits. It drives me crazy. Here's what those fools don't realize. If Tesla is not alone in the car industry, but all those things would be material if we were the only car company in existence. We are not. There are many car companies. What matters is whether we have a relative advantage in the market."
But Tesla burned through $623 million of cash in its most recent quarter, and while that was an improvement from the nearly $1 billion cash burn in the previous quarter, it was still the second highest total in the company's history. Lose the tax breaks and subsidies renewable energy companies get and this hole could get deeper fast.
"He definitely goes where there is government money," Dan Dolev, an analyst at Jefferies Equity Research, wrote in a research note that was quoted by The Times. "That's a great strategy, but the government will cut you off one day."
I emailed Tesla about all this and they sent me Musk's statement from February about why he joined the council in the first place:
"In December, I agreed to join the Presidential Advisory Forum to provide feedback on issues that I think are important for our country and the world. In tomorrow's meeting, I and others will express our objections to the recent executive order on immigration and offer suggestions for changes to the policy.
Advisory councils simply provide advice and attending does not mean that I agree with actions by the Administration. My goals are to accelerate the world's transition to sustainable energy and to help make humanity a multi-planet civilization, a consequence of which will be the creation of hundreds of thousands of jobs and a more inspiring future for all. I understand the perspective of those who object to my attending this meeting, but I believe at this time that engaging on critical issues will on balance serve the greater good."
So, sure, Musk obviously feels like it is not worth his time to even do that anymore. But that choice could be Tesla's loss.
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