To The Moon

I am going to share upfront a controversial statement. 

For Elon Musk, it's not about Donald Trump, never was... Rather, it's about Elon Musk himself... Yet it's all about Donald Trump... 

Facts:

1) By now, we all know Donald Trump is going to be the next US President.

2) Elon Musk has positioned himself at the front of Donald Trump's election campaign.

3) Donald Trump has appointed Elon Musk to co-lead a new department, called the Department of Government Efficiency (DOGE - aka the acronym for cryptocurrency, Dogecoin, created to make fun of crypto mania), for the sole purpose of cutting federal budget.

Elon Musk is obviously an intelligent being and requires no introduction. Between Harris and Trump, the choice is clear, as far as Elon Musk is concerned. Donald Trump, no matter how much you hate him, is positioned as a clear piece of transparent plastic sheet (plastic is appropriate given his love for oil and gas, environmental unfriendly and love of processed food like McDonald's).

Crucially, Donald Trump doesn't like electric vehicles (EVs) and obviously dislike the subsidies on EVs. Elon Musk is linked to many things, but his current primary wealth is a result of Tesla, an EV company no matter how he loves to say otherwise. The future of Tesla could definitely be very different, but for now, as far as money flow is concerned, selling EVs is front and centre of Tesla as a business. 

Having said that, given the fierce competitions from Chinese EV manufacturers (especially BYD), Tesla has grown into a phase whereby any sales without substantial cuts in production cost is not going to make a big profit statement to its bottom line. The obvious new direction sets out by Elon Musk is autonomous driving or robocab.

Given Tesla's unfavorable accidental rates track record under the watchful eyes of US regulator, robocab has a problem. A big one indeed! Elon Musk being the intelligent being he is, has a ready solution prior to US Presidential election. Rather than taking things as it comes, Elon Musk has obviously decided to influence the process.

He bets the horse that will reward its backer! As mentioned earlier, for all of Trump's flaws, he is clear as a transparent plastic sheet. He rewards people who are useful to his cause, criminal or otherwise. Elon Musk has proven his usefulness with money thrown behind Trump's successful campaign.

Elon Musk is no longer interested in the EVs subsidies provided by the US government. The subsidies is the main reason how Tesla GT gets to its current leading position. However, as I had discussed above, the diminishing subsidies will do little for Tesla in the future. The big fish is in the robocab project! Imagine if Tesla can take over the role of Uber and Grab combined without their main running cost! 

There are two ways Tesla or Elon Musk could play this. 

1) Tesla can stop selling any more EVs and just uses its robocab to replace ALL taxis! Oh yes, all taxis, Uber and Grab... The biggest running cost for this business is human drivers. This has prevented Uber and Grab from turning profitable. With this big cost gone, how big a profit would Tesla be looking at.

2) Taxis, Grab and Uber might have no choice but buy robocab from Tesla, subsidies or not, at the asking price of Tesla. This would likely include a running fee, called licencing fee. They would be forced to do so to prevent Tesla from entering the market.

No matter how you cut it, hate him or like him, Elon Musk will achieve his objective. AI training cannot be completed without more data. Data collection cannot be carried out without more autonomous vehicle on the road (not simulator). Accidents will happen, people will still die. We have known Elon Musk from his track record. All these sacrifices and experiments are necessary, from his understanding, for fulfilling the greater good of human race. It's may sound controversial but at the same time, it's arguable. It just depends on who you asked and the boundaries of your morals.

To conclude, Tesla won't be affected adversely by the pettiness of the EV subsidies. From what I have written above, it stands only to benefit. Removal of EVs subsidies simply eliminates its US competitors and does nothing to prevent the progression of its own agenda.