Elon Musk announced that he will temporarily suspend further investment in his planned Mexican factory until the results of the U.S. presidential election are clear. This decision stems from the additional tariffs promised by Republican candidate Donald Trump on Mexican manufactured goods, which will bring significant political risks.$Tesla (TSLA.US)$The investment in the planned Mexican factory will be temporarily suspended by Elon Musk until the results of the U.S. presidential election are clear. This decision is based on the additional tariffs promised by Republican candidate Donald Trump on Mexican manufactured goods, which will bring significant political risks.
Tesla (TSLA.US) released its second quarter financial report after the Eastern Time on Tuesday. The financial report shows that Tesla's second quarter revenue is $25.5 billion, the market expectation is $24.8 billion, and the same period last year is $24.927 billion, a year-on-year increase of 2%; the second quarter operating profit is $1.605 billion, a year-on-year decrease of 33%, and the market expectation is $1.81 billion; the net income decreased by 45% from $2.7 billion in the same period last year to $1.48 billion; the adjusted EPS was $0.52, lower than the market expectation of $0.6.
During Tesla's earnings call on Tuesday, Musk said, "We have to wait to see what happens after the election." As the CEO of this electric car manufacturer, he has officially expressed his support for Trump earlier this month. This is the first time Musk has taken a stance on his business decisions based on the US presidential election results. He explained to investors and analysts that "Trump has indicated that he will impose high tariffs on cars manufactured in Mexico. If implemented, it will be meaningless to make large-scale investments in Mexico. We must wait for the further clarification of the political situation."
Musk's decision not only highlights the political risks facing Mexico, but also raises questions about the future growth of the electric car industry. Mexico hopes to benefit from Joe Biden's near-shore outsourcing policy, and Tesla's super factory is one of the largest investments announced by Mexico in recent years. In addition, this also poses a challenge to the development of the electric car industry in the United States that has received support from the Inflation Reduction Act.
Tesla has been postponing its plans to build a factory in Nuevo Leon, Mexico, although local officials insist that the construction of the plant is still underway. The office of Nuevo Leon Governor Samuel Garcia has yet to respond to a request for comment from reporters.
Earlier, shortly after Trump's attempted assassination, Musk quickly expressed his support for him and promised to donate huge sums of money to the political action committee that supports Trump. Although he reportedly plans to donate about US$45 million to the committee per month, according to the latest quarterly financial report of the committee, as of the end of June, Musk had not fulfilled this promise. Whether he has donated or not will have to wait until October 15 when the Political Action Committee submits documents to the Federal Election Commission.
When asked about the impact of Trump's election on Tesla, Musk responded by asking what impact the cut in Inflation Reduction Act would have on automakers. Tesla's business has already received a huge boost from the manufacturing and investment tax credits under the Act.
"If the Inflation Reduction Act is cut or revoked, it will be devastating for our competitors and will cause slight harm to Tesla. The value of Tesla lies mainly in its autopilot technology," Musk said.
It is worth noting that according to data from the Pew Research Center, only 13% of Republican and right-wing voters are interested in buying full-electric vehicles this year, while 45% of Democratic and left-wing voters show a higher level of interest. This data shows the political and ideological divisions in the electric car market, and also highlights the challenges and opportunities that Tesla faces in promoting the popularization of electric cars.
In Tesla's latest financial report, it also revealed that the company postponed the launch of its self-driving rental car Robotaxi to October 10, two months later than originally planned, to incorporate the design changes required by Musk. This highly anticipated activity will provide investors with an opportunity to evaluate Tesla's autonomous driving technology, which Musk sees as the future of the company. Tesla ultimately plans to provide fully self-driving service through a proprietary taxi app similar to Uber.
It was reported earlier that Tesla delayed the event until October in order to have time to manufacture more prototype cars. This decision reflects Tesla's continued commitment to product improvement and technological innovation, as well as the company's ambition and leadership in the field of self-driving.
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