President Biden said something completely obvious on Feb. 8 — and it was big news for one of America’s most innovative companies.
During an otherwise unremarkable address on domestic manufacturing, Biden referred to Tesla (TSLA) as “our nation’s largest electric vehicle maker.” This is unmistakably true, and nobody disputes it.
But up till now, Biden has pushed aggressively for more electric vehicle manufacturing without ever acknowledging that Tesla already produces close to 1 million EVs per year. Instead, Biden has pretended General Motors and Ford are leading the way on electrification.
GM (GM) and Ford (F) are not leading. They’re following Tesla, which produced its first EV in 2008 and is now the world’s most valuable car company. Yet, Tesla has been absent from Biden remarks, and while the CEOs of GM and Ford are regulars at White House events, Tesla CEO Elon Musk hasn’t appeared with Biden once. What’s their beef?
The short answer: unions. Biden has unabashedly tried to shore up support among union members who have traditionally voted for Democrats but have been drifting to the Republican Party. Former president Barack Obama won 61% of union households in the 2012 election, but Hillary Clinton won just 51% four years later, amid Donald Trump’s aggressive populism and protectionist trade policy. Biden bumped that back up to 57% of union households in the 2020 presidential election, with Trump getting 40%.
Union voters helped Biden win the crucial swing states of Michigan and Wisconsin in 2020. But Trump won a majority of union households in Pennsylvania, which Biden won overall, and in Ohio, which Biden lost. So it would be a mistake for Biden and his fellow Democrats to take the union vote for granted.
Biden pledged to be “the most pro-union president you’ve ever seen,” and that has materialized in his policies. The most pro-union policy relating to EVs is the tax credit for purchases in Biden’s “Build Back Better” legislation. The original bill included a $7,500 tax credit for anybody buying an electric vehicle, which would effectively cut the price by that amount. Starting in 2026, the credit would only apply to vehicles made in the United States, so imports wouldn’t qualify. And there would be an additional $4,500 credit for EVs built at a union plant.
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GM, Ford and Jeep-Chrysler parent Stellantis operate fully unionized plants in the United States. Most other automakers, including Tesla, are not unionized. And Musk, not surprisingly, was most outspoken about a Biden policy clearly meant to favor unionized automakers over non-unionized ones.
In December, Musk encouraged Congress to vote down Biden’s EV subsidies.
“I'm literally saying get rid of all subsidies," Musk said during a livestreamed Wall Street Journal interview. That provoked charges of hypocrisy, given that Tesla has been the biggest beneficiary of U.S. tax credits dating back to 2008, which subsidized early purchases of EVs.
Late last year, Tesla supporters began to agitate for the White House to acknowledge Tesla’s EV leadership. Reporters started asking White House briefers why Musk wasn’t invited to EV events, along with the GM and Ford CEOs. Musk, always eager to raise the voltage, egged everybody on. “For reasons unknown, @potus is unable to say the word 'Tesla,' he tweeted on Jan. 30, while promoting a change.org petition urging Biden to do exactly that.
So on Feb. 8, Biden capitulated, and said the word “Tesla.” But only once! And his mention of Tesla came after he praised “iconic companies like GM and Ford building out new electric vehicle production.” Startup Rivian (RIVN) rated one mention as well, as did Proterra (PTRA), an electric bus manufacturer.
Is the beef settled? Website Electrek reported that Biden’s acknowledgement was “calming Elon Musk fans,” like a magic pill that suddenly makes everything okay in the Elonverse. But it seems unlikely Musk will ever be part of a Biden EV photo op, or support Biden EV policies.
Biden isn’t going to change his pro-union views, while Musk has anti-union leanings and has even tussled with the National Labor Relations Board about possible intimidation of Tesla workers interested in unionizing. Musk has also battled the Securities and Exchange Commission (SEC) over charges of misleading Tesla investors. And in 2020, Musk kept Tesla’s California factory running, in violation of COVID lockdown rules. He’s a countercultural hero, but more Trumpy than Bidenesque.
Musk, the world’s richest person, also has a sophomoric streak that can make him an awkward guest for anybody who cares about decorum — as Biden undoubtedly does. In a Jan. 27 tweet, Musk called Biden a “damp [sock] puppet in human form.” Last November, after Sen. Bernie Sanders tweeted about the wealthy not paying enough in taxes, Musk responded to Sanders by saying, “I keep forgetting that you’re still alive.”
If Biden ever invited Musk to an event, it would revive every Musk troll and probably force Biden to explain whether he really is a damp sock puppet. Musk would love it. Biden most definitely would not.
Rick Newman is a columnist and author of four books, including "Rebounders: How Winners Pivot from Setback to Success.” Follow him on Twitter: @rickjnewman. You can also send confidential tips.
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