Former Tesla Exec Notes That Trump Was Bad For Tesla & Biden Was Much Better

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It’s no secret that Republican and Democrat policies on EVs, solar, and climate action are extremely different. Lately, there’s been some weird warping of which policies are better for Tesla. Well, Rohan Patel felt the need to chime in to get the discussion back on track. Patel worked for Tesla for more than 7 years and was the company’s Vice President of Global Public Policy and Business Development.

I’ll pull out a few different matters in quotes below in order to briefly discuss them, but here are the source tweets:

At this point you’re just pushing out misinformation, @WholeMarsBlog.

There is 1 PHEV (Pacifica) that qualifies for the full consumer incentive and hardly anyone buys it.

If you ask anyone in the sales department at Tesla whether they want the $7,500 consumer incentive they… https://t.co/VOBOgYfVsc

— Rohan Patel (@rohanspatel) September 3, 2024

Here’s the followup post from him in response to that first one:

I have many differences with Biden from a rhetorical and substantive perspective. Many.

But to argue Trump was anything but a disaster for Tesla on virtually anything of commercial significance is historical fiction.

— Rohan Patel (@rohanspatel) September 3, 2024

First of all, this idea that Tesla wasn’t benefited by bringing back the $7500 federal EV tax credit on its cars is mind boggling, sort of insane. It’s one of those examples that goes to show how detached from reality people are willing to become on these issues.

As the EV tax credit was initially formulated many years ago, there was going to be a 200,000 vehicle cap, or milestone, on the tax credit. Once 200,000 EVs were awarded the tax credit, it was going to be phased out. Advocates from Plug In America lobbied Congress to make it more substantial and they got the 200,000 vehicle milestone (initiation of the phaseout) applied to each individual automaker. That meant many more EVs would get subsidized, and thus bought sooner. In 2018, I interviewed a longtime core member of Plug In America for our Cleantech Talk podcast, and he told me the story on that podcast. You can still listen to that here:

Despite being a big win for EVs, that led to early leaders having their subsidies phase out sooner than others’. Most notably, it affected Tesla and GM and buyers of their EVs could no longer get any federal subsidies — while buyers of EVs from other brands still could. Naturally, this created a big disadvantage for Tesla. At the time, it didn’t matter too much since there weren’t many attractive and truly competitive options on the market. But that would certainly change in time if something wasn’t done. Well, when Democrats had control of the House of Representatives and the US Senate, and Joe Biden had become president, they passed legislation that revived the tax credit for those companies and expanded it in other ways, while also prioritizing the development of a homegrown EV battery supply chain and trying to disentangle us from a severe dependence on batteries and battery materials from China.

The fact that you can now get a full $7,500 tax credit on any Tesla Model 3 or Tesla Model Y obviously helps Tesla, especially as Tesla has started to face demand challenges. Without being eligible for that tax credit, there’s no doubt many EV buyers would buy an EV from another brand. As Rohan Patel says, “If you ask anyone in the sales department at Tesla whether they want the $7,500 consumer incentive they will say… ‘obviously’.”

Now, one could argue that Tesla would just lower the price of its vehicles by $7,500 if the tax credit didn’t exist, but that’s obviously not going to work since it would mean losing money on every vehicle instead of making money on them. Tesla’s gross margin wouldn’t just shrink (as it’s been doing), but would turn negative.

One can say that all subsidies should be removed. That’s just crazy talk, especially since no one is going to go removing all the subsidies oil and gasoline get, so creating an “even playing field” is a total fiction and should be laughed out of the room. It’s not happening. The best correction for the market we have at the moment — in order to deal with market “externalities” and subsidies that benefit gas-powered cars — is to just subsidize EVs.

Again, though, if Biden and Democrats had done nothing, you could get the $7,500 tax credit on EVs like the Kia EV6, Hyundai IONIQ 5, Ford Mustang Mach-E, Ford F-150 Lightning, etc., but not on Tesla vehicles. How in the world can one say the Biden administration and Democrats during their brief control of Congress didn’t provide big help to Tesla in this regard.

Tesla has also gained big subsidies for EV charging stations, lithium extraction and procession, EV battery cell production, and EV battery pack production. The Biden administration and Democrats have sent a lot of money Tesla’s way, which has helped it to be more competitive than ever in the auto market.

On the flip side, Patel highlights that the Trump administration fought EVs, including Tesla, when it was in power. “During the Trump admin, there was an active effort to undermine pretty much every substantive policy that helped Tesla’s energy and vehicle and charging business,” Patel notes.

He also topped it off with this: “Did you think Trump’s SEC chairman was correct in taking away Elon’s first amendment rights (those were E’s arguments in court).” …

And then this: “But to argue Trump was anything but a disaster for Tesla on virtually anything of commercial significance is historical fiction.”

That’s just it. People got upset because Biden is very pro-unions, Elon Musk is very anti-union, and Musk wasn’t highlighted or invited to a party celebrating the transition to EVs. I get that, and I criticized it at the time. I also think it was just foolish politically and probably Biden’s worst decision as president — not because it actually mattered in any substantial way, but because it was bad marketing and antagonized Musk, who has a lot of influence over millions of people.

There’s a massive difference between politics and policy. Politics is basically marketing. Policy is what you actually do when in power.

Joe Biden messed up politically by not highlighting Tesla’s leadership and working with Elon Musk to do so. However, policy wise, the Biden admin has been hugely helpful to Tesla.

Donald Trump, on the other hand, did nothing to support EVs and even attacked the EV industry. He actually did something which many would have considered impossible or crazy if any other president brought up the idea — he had his administration sue to take away California’s right to require stronger fuel economy standards for automobiles, a right it was granted when the Clean Air Act amendments of 1970 were created and signed into law by President Richard Nixon. If they had somehow succeeded, EV adoption in the US would be severely harmed. Luckily, once President Biden got into office, he killed the lawsuit.

Again, as Patel argues, some people are trying to rewrite history. They are trying to rewrite the basics of the economy and government support for versus attacks on EVs, including as they relate to Tesla itself. It is an attempt at fiction that is being sold as non-fiction.

If you don’t believe me, you should at least believe the person who worked on these matters for Tesla for several years.