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Tesla CEO Elon Musk.
Patrick Pleul – Pool / Getty Imagess
Tesla CEO Elon Musk is training again with the Biden administration, giving investors already tracking of new models, new capabilities and new features another issue to consider.
The friction started when President Joe Biden appeared to snub
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(ticker: TSLA), by far the world’s largest manufacturer of electric vehicles, at a ceremony to announce its administration’s EV targets in August. People from
General Motors
(GM) and
Ford engine
(F) was in attendance as the president said he expected electric vehicles to account for 50% of new car sales by 2030.
Musk tweeted that the decision to exclude Tesla was odd.
Musk recently shot Biden for failing to praise his space company, SpaceX, for launching four civilian astronauts into orbit and getting them safely home. The first orbital mission flown by non-professional astronauts garnered praise from all corners except the Oval Office.
Union representation appears to be the main reason Biden might ignore Musk. Tesla does not employ unionized labor at its only operating US plant in Fremont, California. And the current version of Biden’s $ 3.5 trillion infrastructure bill provides for an additional tax credit for electric vehicles made in unionized stores. This would put Tesla vehicles at a bit of a disadvantage compared to those made by Ford or GM.
For investors, EV tax credits are fairly easy to understand. More tax credits for others would be a bad thing for Tesla, although Tesla buyers have not qualified for federal credits for electric vehicles for a few years. Under current rules, credits are not available if a company has sold more than 200,000 electric vehicles in the United States, a milestone Tesla has already taken.
Another government relations issue for Tesla is the deployment of more sophisticated versions of its autonomous driving software. Many automakers offer driver-assist features like adaptive cruise control and lane-keeping assist, but Tesla has been more aggressive, with a push towards features that go further towards a fully-fledged vehicle. autonomous.
The National Highway Traffic Safety Administration has expressed concern over Tesla’s plan to expand the driver assistance tools that have been used on highways for use in cities. “Basic security concerns need to be addressed before it is extended to other streets in the city and other areas,” said Jennifer Homendy, the new director of NHTSA, in an interview with the The Wall Street Journal. Ms Homendy also expressed doubts about how Tesla software is tested on public roads.
The agency could, in theory, slow down the rollout of Tesla’s fully autonomous driving system or limit its functionality. NHTSA and Tesla did not immediately respond to requests for comment.
All current systems, including those from Tesla, require drivers to keep their eyes on the road at all times.
The success or failure of the fully autonomous driving mode will affect the stock. Regulatory concerns are the last things investors want to watch. The company is preparing to open two new factories and deliver its new light truck in the coming months.
On Monday, Tesla stock was up around 8% year-to-date, behind comparable returns of 18% and 13% of the
S&P 500
and
Dow Jones Industrial Average.
Shares gained 743% in 2020.
Write to Al Root at [email protected]
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