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This Week in Elon: Musk Mocks Biden Amid Cooler Political Climate, Federal Investigation of Tesla

By Doug Messier
Parabolic Arc
September 24, 2021
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Elon Musk (Credit: SpaceX)

by Douglas Messier
Managing Editor

It seems that Elon Musk is a bit peeved that President Joe Biden didn’t congratulate SpaceX on completing the privately-funded Inspiration4 crewed mission last week and helping to raise $210 million for St. Jude Children’s Research Hospital.

“He’s still sleeping,” Musk wrote in response to a question from a Twitter follower about Biden’s silence. It was a clear reference to ex-President Donald Trump’s description of him as “sleepy Joe” during the campaign.

The remark set off the usual battle on social media. Musk’s legion of defenders called the omission unforgivable. Musk’s critics noted his willingness to amply praise authoritarian China where Musk’s Tesla Motors has a manufacturing plant even as he called U.S. officials “fascists” for their efforts to contain the deadly COVID-19 virus.

For his part, Jared Isaacman, the billionaire who funded and commanded the Inspiration4 flight, says Biden’s silence is no big deal.

“It’s really fine. We didn’t create @inspiration4x for recognition. I am sure any person of wealth on a space mission is politically radioactive… regardless of the good that was accomplished,” he tweeted in response to a question about not hearing from Biden or Vice President Kamala Harris, who chairs the National Space Council.

Inspiration4 crew in orbit. (Credit: Inspiration4)

There’s more going on here than the White House ignoring a 3-day spaceflight. Musk and his businesses are facing a much different political and regulatory environment than they were a year ago under Trump.

Tesla was excluded from a recent meeting of U.S. automakers at the White House. The pro-union Biden Administration wants to give higher tax credits to automakers that produce electric cars in union shops than ones that don’t. (Tesla is non-union.) The administration also wants billionaires like Musk to pay more in taxes.

Musk is seen in the space industry as someone who is hopelessly optimistic on schedule but eventually delivers on his promises. SpaceX’s record of successful launches and missions to the International Space Station speaks for itself. SpaceX’s business hasn’t suffered from the change in administration; NASA awarded the company a sole-source contract to build the Human Landing System to return astronauts to the lunar surface.

Musk’s reputation in the auto industry is mixed. He has legions of fans and admirers who love his cars. But, there have been complaints about the poor quality of Tesla’s vehicles, safety problems, long waits for repairs, and poor customer service. Critics say Musk is more focused on producing quantity than quality.

The most serious charge is that Musk and Tesla have profited greatly by overselling the capability of Tesla vehicles to drive themselves. Tesla charges $10,000 for a Full Self Driving package that Motor Trend said “does not live up to its name.” There are Autopilot features with monthly subscriptions that cost less. The revenues have been crucial to Tesla’s bottom line.

Musk has put forth many optimistic — and subsequently missed — goals for when Tesla will deliver a vehicle capable of driving itself with no driver input. He predicted there would be 1 million Tesla robo-taxis on the road in 2020, shuffling passengers from place to place and producing revenues while their owners were home asleep in bed. Critics say Tesla is nowhere near being able to achieve that goal, and that the self-driving systems the company has produced are flawed and dangerous.

The National Highway Traffic Safety Administration (NHTSA) has begun a preliminary evaluation of why Tesla automobiles on Autopilot have slammed into the backs of emergency vehicles parked at the scenes of accidents.

It’s unclear how far the NHTSA’s evaluation will go, but the Biden Administration seems much more commitment to enforcing laws and regulations than its predecessor. And that poses risks to Tesla, as one commentator who is no fan of Musk pointed out. (Emphasis original)

In a saner regulatory environment Tesla’s selling of “Full Self Driving” for five years now would be considered “consumer fraud,” and indeed in August two U.S. Senators finally demanded an FTC investigation while the NHTSA opened yet another safety investigation. (For all known Tesla deaths see Will there be major write-downs and refunds given, killing the company’s slight “profitability”? 

The FTC is the Federal Trade Commission, whose duties include investigating consumer fraud. Sens. Richard Blumenthal (D-Conn.) and Edward J. Markey (D-Mass.) have accused the company of falsely advertising its vehicles’ self-driving capabilities.

There is the possibility Tesla might have to refund money buyers have paid for Autopilot and FSD. It might even have to restate past earnings, which could put entire quarters in the red. Those actions could tank Tesla’s high stock price and significantly reduce Musk’s net worth.

Musk receives a low salary from Tesla. He has received tens of billions of dollars in stock as part of a compensation package pegged to how well the company does each year. Restatement of past earnings could result a voiding of some of those awards, not to mention multiple shareholder lawsuits. Musk would have far less money to put toward his ultimate goal of establishing a permanent human settlement on Mars.

We are not anywhere close those things happening to Musk and Tesla. And it might never get to that point. But, given the potential consequences, the NHTSA inquiry is something to keep an eye on.