From Guest Blogger Andrew Alcal: Elon Musk and Trump’s Energy Policies
Elon Musk recently accomplished his goal of merging SolarCity with Tesla. This bold move is meant to rescue SolarCity from excessive revenue losses in previous quarters while also attempting to create a more streamlined energy service. But Musk may have a new problem to face in the form of president-elect Donald Trump and his energy policies.
Donald Trump’s campaign focused heavily on job creation in the United States. He plans to lift regulations on oil drilling and fracking in hopes of stimulating job growth and relieving dependency on foreign oil. This includes increasing offshore drilling and leasing federal land. His energy policies also extend internationally, “His promises include actions like ‘canceling’ the Paris agreement and dismantling the U.S. Environmental Protection Agency (EPA) as well as repealing restrictions on domestic energy development”. Policies such as these could exacerbate the harsh climate effects seen today.
Regardless of other politics many Republicans, including Trump, believe climate change is a hoax and deny any increase in greenhouse gas emissions. Although Trump has stated he is open to renewable energies but will not prioritize their initiatives over fossil fuels. Unfortunately this could mean his energy policies will benefit non-renewable energy companies more than renewable ones. Renewable energy generates revenue in the long term which could make oil and coal more appealing to politicians and the public.
Under the Obama administration Musk has received subsides for SolarCity and funding for SpaceX. Currently Tesla offers a $7,500 tax credit and a limited number of free charges. Other incentives include California and Nevada’s carpool lane access and reduced vehicle charging rates. But many of these benefits will be up for renewal in congress which is now Republican controlled. Many companies have already criticized Tesla for their autopilot car crash in spite of auto accidents becoming common even in the workplace.
Musk’s biggest threat is market control by non-renewable energy companies. Trump’s policies favor these companies because they are already well established. Not only Tesla but new energy companies will also have a hard time breaking into cities with high existing business growth. Musk has already experienced difficulty breaking into the Nevada energy market, “Because power companies operate in a highly regulated industry, they stay close to elected officials. NV Energy’s ties in Nevada were particularly strong.” Trump’s policies are based on the belief that regulation hinders productivity and efficiency. But too few regulations can create monopolies and more complications for new companies.
After the election many energy stocks fell and fluctuated but since have returned to normal. Tesla’s increase in production could be what Musk needs in Trump’s job centered administration. Tesla is increasing production because of a record breaking pre-orders of the Model 3, their cheapest produces vehicle. This also led to the creation of the Tesla Gigafactory born out of necessity to relieve dependency of lithium and supply enough batteries to support vehicle demand. Elon Musk is not worried though saying, “I don’t think it’s very high, it’s not going to make too much of a difference honestly”.
