Why The Government Is Finally Working With Tesla!

Is the United States government finally ready to work with Elon Musk and Tesla? Because as many of you know, the relationship between them, particularly Joe Biden and Elon Musk, has been a bit weird for the past year. With Biden seeming to go out of his way to snub Tesla and just straight up pretend that they don’t exist. And being that Tesla is not only an American company, but also one of the largest and fastest growing companies in the world, who is almost single handedly pushing forward the adoption of electric vehicles and sustainable energy - it strikes many people as unusual that the American President isn’t more stoked about that.

But are things starting to turn around? There are a few examples floating around lately that would actually lead us to believe that yes, the Feds are warming up to Elon Musk. It’s not like a love affair is about to break out between them or anything - and there is still some pretty thinly veiled anti-Tesla sentiment floating around. But hey, it is a start. So let’s talk about it.

And just a quick bit off the top, as many of you know, we’re Canadian, so I don’t participate or even really claim to understand US politics. So, we’re not picking sides or anything just trying to call it like we see it,

Elon Gives US Labor Sec a Giga Tour

So we start off with some very good news. Just the other day, we found out that Elon Musk took The United States Labor Secretary, Marty Walsh, on a personal tour of Giga Texas. We’re not sure exactly what sparked the hang out, but we know that Walsh was in Austin to speak at South by Southwest about several job market topics.

We’re told that during his visit to Tesla’s GigaFactory, Walsh had a 75-minute conversation with Elon Musk about a wide variety of topics, including inflation, innovation, and job creation. They even took a picture together above the production floor - Elon looks happy, Walsh looks very serious. They both have nearly identical taste in shoes, apparently.

Anyway, following the conversation Elon reportedly said that he wants to keep the conversation going. So very good news.

And it’s hard to imagine that Secretary Walsh was not impressed by what he saw. This factory epic - three quarters of a mile long and a quarter mile wide, seven stories tall. It’s one of the largest buildings in the world. And the factory opening party is just a few days away on April 7th. 

Giga Texas is going to cost Elon more than 10 billion dollars in the long term, and he promises that at least 20 thousand jobs will be created directly by the factory and 100,000 more indirectly - I’m sure that’s the kind of thing that the Labor Secretary would get pretty excited about. I would hope at least. So we’ll see what happens when Walsh reports back to his colleagues.

Waiting in Line for Batteries

On the other hand, we have Democrats like good old Joe Manchin, Senator from West Virginia. This is the same guy who almost single handedly killed Biden’s Build Back Better legislation that included all kinds of new spending for electric vehicles and EV infrastructure. 

Manchin came back around for another swing at EVs recently when he said "I'm very reluctant to go down the path of electric vehicles." And then went on to try and make an analogy to something that happened 50 years ago, quote, "I'm old enough to remember standing in line in 1974 trying to buy gas — I remember those days. I don't want to have to be standing in line waiting for a battery for my vehicle because we're now dependent on a foreign supply chain — mostly China."

So, I don’t think he understands how electric car’s work. Does he think you have to replace the battery like in a TV remote? Like, buy a new one every year or so? Who knows. Manchin could probably benefit greatly from his own tour of a GigaFactory.

Joe Biden Said “Tesla”

Speaking of old people in the US Democratic party, none are more significant than Joe Biden himself, the President of the United States. And Joe has now actually said the word Tesla in public. In fact, he’s said it twice. Two Times.

It took just a little bit over one year in office, but in February Biden said, quote, “Since 2021, companies have announced investments totaling more than $200 billion in domestic manufacturing here in America. From iconic companies like GM and Ford, building out new electric vehicle production facilities, to Tesla, our nation’s largest electric vehicle manufacturer, to innovative, younger companies like Rivian, building electric trucks, or ProTerra, building electric buses.”

So, it’s not exactly glowing praise, but we’re starting off slow. Maybe Joe’s playing hard to get. I think he did say it again a few days later where he was repeating pretty much the same speech. But that’s about where the pleasantries end with Joe. 

Last August, Elon was not invited to a White House meeting with American automakers, Tesla was the only major car maker excluded. Then, in January, Tesla was again left out of an official White House video that promoted electric vehicles and featured GM CEO Mary Barra - who Biden claims has led the electric car industry. She hasn’t.

In an interview with CNBC, Elon made his feelings on the matter very well known, saying, “Biden has pointedly ignored Tesla at every turn and falsely stated to the public that GM leads the electric car industry. Tesla produced over 300,000 electric vehicles last quarter, and GM produced 26.” 

That’s true, by the way, they did only build 26 electric cars from October to December 2021 - there was a single Hummer EV, the other 25 were the Chevy Bolt prior to it being canceled for bursting into flames at random moments.

Then there was the State of The Union address, even I know that’s a very big deal for the sitting US government. And again, plenty of mention of American cars and electric vehicles, but no Tesla. Elon Musk replied on Twitter to say, “Tesla has created over 50,000 US jobs building electric vehicles & is investing more than double GM + Ford combined.”

According to a Bloomberg report, Tesla’s factory in Fremont, California is the most productive automotive plant in all of North America, building an average of 8,550 cars a week. And then starting next month, add the Texas GigaFactory to that productivity. Pretty weird stuff.

Can Tesla Help Solve the Chip Shortage?

But Marty Walsh isn’t the only Democrat that is breaking ranks with Biden and daring to talk about Tesla in the public eye. Not that long ago, Commerce Secretary Gina Raimondo said that the U.S. would seek the help of anyone who could help the country defy the chip and semiconductor shortages that have plagued industries for nearly two years. Raimondo’s focus would be the American automotive sector, where Tesla has been able to combat the micro chip shortages through in-house advances and quick thinking strategies.

Now, she did still stop short of explicitly saying Tesla, but she said enough to know who she means. Riamondo told Bloomberg, quote, “These issues are way too important for anyone to have, you know, feelings hurt. Like – let’s just do the work. And as I said, anyone who has good ideas or is willing to help us, absolutely we want the help.” Raimondo added that Tesla had navigated the chip shortage better than any other due to its roots as a tech company, not an automaker.

And Secretary Raimondo is absolutely correct in that Tesla is the only automaker who have been able to accelerate their production over the past two year, increasing by over 50 percent, with 936,000 deliveries in 2021 versus 500,000 in 2020. And to compare with Biden’s favorite car maker, GM, they delivered 2.2 million vehicles in 2021, which is a 13% decline from 2020 numbers, and well down from the 2.9 million cars delivered in 2019. So, Tesla clearly knows something that the competition does not. Would probably be useful to know the secret. Elon’s never actually been shy about cooperation, he’s released many of the Tesla patents for free on the internet.

Is This a Union Job?

Many people have speculated, and are probably correct, that Joe Biden doesn’t like Elon because Joe is a big union man - and Tesla workers are not unionized. This is a source of much contention over the years and something that Elon gets flak for often.

Elon Musk has a long history of being labeled anti-union and even accusations of union busting. Earlier this month, Elon hit something of a breaking point and threw the ball into the United Autoworker Union’s court.

Elon invited the United Auto Workers Union to his plant in Fremont California where he says they will freely allow workers to vote on union membership. Elon says that UAW can hold the vote at their convenience and that Tesla would do nothing to stop it.

This comment actually came from Elon in response to Gene Simmons - yeah, that Gene Simmons, the one from Kiss with the giant tongue. It’s a weird reality we live in. Anyway - The former bassist from Kiss urged US President Joe Biden to recognize Tesla even if its workers are non-union. And Elon Musk later highlighted that ultimately, the real challenge for Tesla is that the Bay Area has negative unemployment. This meant that if Tesla didn't treat its workers well, its employees would simply leave for better jobs.

This is a definite power move from Elon, because he’s developed that reputation of being anti-union - even if that’s not actually the truth, that’s how people see him. I think the most anti-union thing Elon has ever said was something along the lines of, ‘why pay union dues when Tesla already offers high wages, stock options and health insurance.’ If workers choose to unionize they would lose access to lucrative stock options that have already made some Tesla production line workers into millionaires. And that’s not a threat from Elon Musk taking away the options, it is UAW policy that no union member can receive stock options from their employer.

Even putting that aside, securing a successful union vote among Tesla’s Fremont Factory employees might be quite tricky. The UAW has a long history in the Fremont plant, having represented employees in the factory from its days as a GM plant all the way to its days as NUMMI, which was a joint venture of GM and Toyota. Of course, membership in the UAW did nothing to protect worker’s jobs after Toyota pulled out of the facility and GM chose to shut it down. During a meeting between UAW officials and Fremont workers, discussions became so heated that a fight nearly broke out.

So, if Tesla employees were to take a vote and choose not to unionize, could folks like Joe Biden still hold that against the company? Yeah, they probably would. But the veil would grow even thinner, that’s for sure.

Elon Musk Loves Oil Now

Maybe Elon can find better favor in politics with his new views on fossil fuel production? This is one that we haven’t really seen any political fallout from, but I’m sure it didn’t go unnoticed. On March 4th, Elon Tweeted, “Hate to say it, but we need to increase oil & gas output immediately. Extraordinary times demand extraordinary measures.” Obviously he’s referring to the rapid uptick in gasoline prices due to economic sanctions against Russia. That kind of sentiment might put Elon more in the good books of the Red Team down there. In case you didn’t know, “Drill baby, drill,” was a rallying cry by Republican candidates in the 2008 election for expanded oil production, it’s actually a line that Sarah Palin famously threw in Biden’s face during a vice presidential debate. Of course, Barack Obama won that contest handily. But, I just thought that was an interesting coincidence.

So, what do you all think? It’s clearly not becoming an Elon Musk lovefest in the halls of the Capitol building or the White House, but there is a noticeable improvement, right? I think it might take another year for Elon to really break through and get his points across, but with how rapidly everything is changing right now, we’re going to need some fresh perspectives from our leadership going forward and that might mean some uncomfortable partnerships.