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Why Wasn’t Tesla Invited to President Biden’s EV Event?

Why Wasn't Tesla Invited to President Biden's EV Event?


Last week, President Joe Biden invited the Detroit automakers — Ford Motor Company (NYSE:F)General Motors (NYSE:GM), and Stellantis (NYSE:STLA), which owns Chrysler — and the United Auto Workers labor union to the White House for an announcement: The Biden administration has agreed to support measures to speed the adoption of electric vehicles (EVs) in the United States, with a goal (shared by the automakers and the UAW) of having EVs make up 40% to 50% of new vehicles sold in the U.S. by 2030.

But many observers had one big question: Why wasn’t the fourth-biggest U.S. automaker, EV pioneer Tesla (NASDAQ:TSLA), invited to the party? In this Motley Fool Live video, recorded on Aug. 5, Industry Focus host Nick Sciple and Motley Fool senior auto specialist John Rosevear debated that question and came to the likely answer, one that was subsequently confirmed by the White House. 

A transcript is below the video.

Nick Sciple: You mentioned a few times, John: Ford, GM, Stellantis. Stellantis, this is this merged company: Fiat, Chrysler, Peugeot. So traditionally we thought of the Big Three automakers, it was Ford, GM, Chrysler, this is still kind of Ford, GM, Chrysler kind of standing up there with the president when he signs this executive order. One company you don’t hear included in there, which is always in the conversation when it comes to American electric vehicles, is Tesla. What do you make of Tesla kind of being snubbed here?

John Rosevear: I don’t know for sure. My guess is they asked Tesla, Tesla said, “No, it’s not our party, we’re not interested.” Or what I think is more likely is that, of course, Tesla is not only nonunion, but they’ve had some fights with the United Auto Workers and Democratic administration, very pro-union, good-paying American jobs is the theme for the Biden team and so forth. I think maybe they didn’t want the nonunion shop that’s been fighting with the UAW to become the story here, when it’s really about good-paying Midwestern blue-collar jobs in swing states where we need them to get reelected. It’s a political calculation. Of course, the Tesla fans on Twitter are screaming about it. But again, Tesla is not a company that needs to be here partly because Tesla has built its own infrastructure to some extent, and it’s already made the investments in electric vehicle technology. And just the huge sums of money that you’re talking about with major Detroit manufacturers. They need the reassurance that the government is going to support their effort to go electric. Tesla is also really not the target audience for this necessarily.

Sciple: Tesla is already doing the things. Tesla is already at 100 percent EV, right?

Rosevear: They’ve built out their own charging network and so forth. I think everybody, including Tesla, would benefit from expanded access to fast chargers. Teslas can use them, too. And certainly, in certain parts of the country, you hear of the big lines at Supercharger stations and so forth. And it’s an ongoing gripe by certain Tesla owners in some areas where it seems like you have to wait an hour and a half to get to a charger, so they would benefit from this indirectly as well. If there’s an expansion of incentives, it’s possible that future Tesla buyers will receive those incentives as well. I don’t know if they’re going to cap it by the price of the vehicle or what. There was some talk of doing that, but even then, Tesla is talking about doing a model below the Model 3 at some point that would presumably qualify, just like the Ford and GM vehicles and Chrysler vehicles in that kind of space.

Sciple: We’ll see what happens. I think it shouldn’t take away from Tesla is a very significant player in U.S. EVs, and I don’t think that that’s going to change depending on whether they are standing behind the president when he signs his executive order. That said, it says something about at least from political point of view, there’s still a certain class of focusing in Washington, maybe other places. that think of the Big Three as one category and then Tesla and some of these others in another category. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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