Elon Musk‘s recent endorsement of former President Donald Trump could have significant implications for Tesla. Benzinga's Premarket Prep team discuss.
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00:00All right, Dennis. We've got about five minutes left. Do I have permission to go on a little mini
00:05DDD rant here? Oh, gosh. I'm a little bit scared, but yes.
00:10Okay. So we're talking about Trump. We're talking about clean energy. We got this news yesterday
00:16that Elon is going to be donating $45 million a month to Trump's campaign. I'm not upset about
00:26Elon doing this individually. People on both sides, you have big tech billionaires donating
00:31hundreds of millions of dollars, collectively hundreds of millions of dollars to Democratic
00:37nominees. I don't love the whole money in politics thing from either side. I'll never blame Elon
00:43individually because he's just taking advantage of a system that's been allowed to persist.
00:48It's like how a lot of people, a lot of liberals will get mad at Trump for doing some tax stuff,
00:54and it's like, okay, well, billionaires have been doing that for years and years and years,
00:57and now you're just getting mad because you don't like Trump. It's not about actually Trump doing
01:00it. It's the fact that this has been allowed to go on. There are people on both sides,
01:07conservatives and liberals, that want to repeal the Citizens United court case that allows for
01:14this crazy money in politics. I just do not understand this at all from a business perspective
01:21for Tesla, and I'll walk you through why. Is he saying he's going to use Tesla money or his
01:26own money? Because I saw the headline, but I didn't read it. It's his own money, but of course,
01:30this is coming from Tesla. People on Twitter have been saying, what if he used that money
01:36on marketing and advertising? Maybe the car sales wouldn't be declining year over year,
01:39and instead he's donating it to Trump. I don't even care about that. It's his own money. He
01:42can do what he wants, Elon. If it's his own money, I'm not as big of an issue. If he's taking Tesla-
01:48It is his own money. He's not taking Tesla money and doing it for Trump's campaign.
01:52I'm just saying from the long term, I've been talking about how I love Tesla's energy storage
01:57side of the business. I'm bullish Tesla because of that. Which states do you think are more likely
02:05to sign contracts for energy storage thing? Blue states or red states? It's blue states.
02:10If you start pissing off, if he gets so buddy-buddy with Trump,
02:14you think Gavin Newsom or someone like that might hold a grudge and not go with Tesla for
02:19something like this? Do you think, by the way, when robo taxis come out, if states are mad at Elon
02:26because he's going the other direction, if they might not pass regulations as quick enough to
02:31legalize the self-driving Teslas or whatever it is? Then the red states, you look at JD Vance or
02:37some of the politicians down in Texas, they're taking money from the oil and gas industry.
02:44They're not going to be that friendly to Tesla. Maybe Elon has talked with Trump behind the scenes
02:49about what he's going to get by donating all this money and getting so buddy-buddy. It just does not
02:55make sense to me from a business decision. I don't think it's going to matter in the short term,
02:59but I think five years down the road, we could be looking back on it and saying,
03:03well, he made a business- He burned his bridges.
03:07He's burned his bridges to try to build a bridge to an area where he may not get the approvals
03:14anyways, like are the Republican states going to give him approval anyways? Then he's burning his
03:20own blue bridges to try to pick up the red bridges. I see where you're going with this,
03:25and it's a good argument. I think he's got the blue bridges anyways, and he's just trying to
03:30pick up the red bridges too. He's playing a game of Monopoly. He's trying to own all the property,
03:34so he wants to get it all. I don't think it hurts if he really believes that Trump is going to win,
03:41which it looks like at this point in time. Obviously, a lot of things can change five
03:45months from now, but at this point in time, it does look like Trump's going to win.
03:48I don't think it hurts to be on the good side of the president in the next administration.
03:52That's true. By the way, I found that there was this old tweet from- and again,
03:57not to get ... I don't know if this is too political. I just thought this was funny.
04:00Someone posted this last night on Twitter because I forgot that this happened. This was from 2022.
04:06Trump tweeting, when Elon Musk came to the White House asking me for help on all his many
04:11subsidized projects, whether it's electric cars that don't drive long enough, driverless cars
04:15that crash, or rocket ships to nowhere, without which subsidies he'd be worthless, which that
04:21part's true. Tesla would have gone bankrupt without California subsidies, and that's been
04:24written about extensively, and telling me how much he was a big Trump fan and Republican.
04:28I could have said, drop to your knees and beg, and he would have done it.
04:32And now Elon's turning around and donating $45 million a month.
04:35Oh, yeah. Times have changed.
04:37Times have changed. Now they're friends, and now they're getting along. I think you make a good
04:41point, Ted, is that maybe he's just saying, look, Trump's going to win anyway.
04:46I need Trump on my side, is what he's saying.
04:48You need him on your side. Yeah, that's a good point.
04:50He needs all these approvals. Again, the biggest hurdle, Gene Munster said it,
04:55we've said it on this show, the biggest hurdle for robo-taxis is going to be regulatory approvals.
05:00It's the biggest hurdle. They got it in California, but one state doesn't make a
05:05business here, so it's going to be a long road to get regulatory approvals in each state.
05:10And that's going to be the biggest issue, because again, let's just say, oh, I got a
05:15self-driving car, I'm going to take a trip from East Coast to West Coast.
05:19Well, you can't drive through this state because you're going to get a ticket for that full
05:23self-drive, or you can't drive through this one. You kind of need all the states, you kind of need
05:27everybody on board. It's a tricky thing. And robo-taxis are a little ways away here, folks,
05:31but obviously they're going to be able to be operational in a few states sooner than later,
05:36or obviously already operating under Waymo in California. I think cozying up and a little bit
05:45of love to Trump, that goes a long way. But I still think if you look at a state like Texas
05:50and that collectively the legislators in Texas are taking in hundreds of millions of dollars from
05:56the oil and gas company, a lot of them are headquartered down there in Houston. Are those
06:01Texas guys going to be like, oh, well, Elon is with Trump, so let's give Tesla this favorable
06:06policy, or will they give it still to the oil and gas companies? Which that's, again, my bigger
06:10issue. And it's on the left and the right that you have these big tech billionaires that donate
06:16to the politicians, and then they get to make the policies, or they get favorable policies for the
06:20hundreds of millions of dollars they're donating. And that's why really over the last 20 years,
06:24you've seen companies basically be in charge of policies. And a lot of people in cities,
06:30in rural areas, right, left, white, black, have felt left behind in America because it hasn't
06:36really operated as a democracy per se and more of like, oh, which company can buy the politician
06:42and donate the most money and then get their favorable policies? And I'm not a fan of that,
06:46whether it be, again, it happens- What goes on though?
06:49Yeah. Stock market,
06:50come on. The stock market's built on this. Let's go ahead and get, speaking of the stock market.