On Thursday, Tesla CEO Elon Musk said that the fact that Donald Trump’s presidency will hurt the company’s auto business is nothing else but a “misunderstanding”. He does not believe that by eliminating zero-emission vehicles credits Tesla will suffer losses. On the contrary.
It will actually be beneficial, says Musk
The question and answer session on Thursday was followed by the voting for Tesla’s acquisition of SolarCity. It is known that Donald Trump is supporting the coal and oil industry. And also a climate change skeptic. Because of this, many people believe that he is going to stop the ZEV credits in California. But Elon Musk thinks that even if this will happen, Tesla will not suffer from it. On the contrary, he believes that it might even help the company improve its position among competitors, on the market.
The California Air Resources Board is the one that runs the ZEV mandate. But what does this mandate consists of? Well, according to it, automakers are required to sell a certain number of vehicles with zero-emission. Otherwise, they are risking a big fine. Apart from California, nine other states have adopted this mandate.
But until now, Trump’s administration has not said anything in regard with their policies. After the election, the Alliance of Automobile Manufacturers said that Trump’s team should take a second look at the economy standards for fuel. Also, at the Obama administration’s standards for vehicles. The idea behind is that the member companies might need to pay billions of dollars because of it. Dave Reichmuth, engineer at the Union of Concerned Scientists says that nobody actually knows what will the Trump administration decide in regards with electric cars. Frankly, now, it is possible that they also do not know where to begin.
Tesla has been selling their Model 3 car just because of the undeniable charisma of their CEO, Elon Musk. Keep in mind that this is a vehicle which will begin assembling sometime in 2017. It could even be 2018. But these problems which the electric car industry might be facing soon do not seem to be affecting Elon Musk. It is a known fact that he was a supporter of Hillary Clinton for the presidency of the United States.
Less ZEV credits, less profit
According to a report, if the ZEV credits were to be removed, Tesla might lose a big part of their profit. By manufacturing electric cars, Tesla has an excess of ZEV credits which they are often selling, gaining huge profit. So their idea is understandable. Still, people should not think that those credits are the biggest part of Tesla’s profit. It helps with the profit, but it is not a huge source of income.
All in all, no matter what Trump might do, everyone else will still abide by the Paris Agreement which fights to reduce the global growth of carbon emissions. There is an entire industry which is investing into electric cars. And those companies are not going to stop anytime soon, just because Trump says so. It is a bigger picture, even bigger than Donald Trump.
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