- Yesterday, the United Nations held its Climate Action Summit. Tesla wants to advance the transition to sustainable energy.
- Overall, the Climate Action Summit disappointed environmentalists. In 2017, President Trump pulled the US out of the Paris climate deal. Tesla’s CEO, Elon Musk, left President Trump’s economic advisory council after the decision.
On Monday, the United Nations held its Climate Action Summit. President Trump made a brief appearance at the summit. Notably, he thinks that climate change concerns are a sham. In 2017, President Trump pulled the US out of the Paris climate deal. Tesla’s (TSLA) CEO, Elon Musk, was part of President Trump’s economic advisory council. However, Musk left the economic advisory council. Tesla’s mission is “to accelerate the world’s transition to sustainable energy.”
Tesla and the Climate Action Summit
The Climate Action Summit had plenty of fanfare and few commitments. Environmentalists weren’t happy with the lack of concrete and actionable steps from world leaders. Climate activist Greta Thunberg made a fiery opening statement laced with frequent “how dare you” rants. She said, “The eyes of all future generations are upon you. And if you choose to fail us, I say we will never forgive you.” Meanwhile, President Trump appeared to mock Thunberg in one of his tweets. President Trump tweeted, “She seems like a very happy young girl looking forward to a bright and wonderful future. So nice to see!”
Tesla has positioned itself as a sustainable energy solutions company. Along with electric vehicles, the company also offers renewable energy products. As a result, the global focus on climate change should be positive for Tesla. However, the Climate Action Summit disappointed some environmentalists. They expected action plans from major countries.
The broader electric vehicle industry relies heavily on government support and subsidies. China’s electric vehicle sales have fallen over the last two months since it lowered subsidies. NIO (NIO), the Chinese electric vehicle maker, blamed lower subsidies and fewer vehicle sales for its declining deliveries. Tesla and NIO are in the red this year. Meanwhile, mainstream automakers including Ford (F) and General Motors (GM) are in the green.
In the absence of price parity with ICE (internal combustion engine) cars, electric vehicles rely on government policies and support. Notably, starting July 1, consumers buying Tesla cars are eligible for a lower federal tax credit. Buyers wouldn’t get a federal tax credit starting next year. InsideEVs estimates that Tesla’s US deliveries fell in August after the lower federal tax credit. Read Why Tesla Seems to Be Struggling with Q3 Deliveries to learn more. Tesla and other electric vehicles will need more support from governments. There could be a policy shift towards electric vehicles to increase subsidies for electric vehicle buyers. From Tesla’s standpoint, even though the push towards renewable energy is positive, it has an energy products business as well.
However, the Climate Action Summit didn’t live up to the expectations. Environmentalists wanted a concrete and actionable roadmap. Overall, any discussion about global climate change helps increase awareness. Electric cars gain popularity. Tesla has established itself as a gold standard in electric vehicles. Increased electric vehicle popularity would help Tesla expand its reach even more. Notably, other automakers’ electric vehicle launches act as a proxy advertisement for the company. Read Are ‘Tesla-Killers’ Free Advertising for Tesla? to learn more.