Tesla’s slump: When social intelligence clashes with artificial intelligence
Elon Musk's politics is redounding on Tesla sales and hurting the company’s share price. Could this lead to Tesla shareholders seeking Musk’s replacement with a politically anodyne boss?
Tesla slump: social intelligence vs Artificial Intelligence
Tesla shares are at a five-month low, Tesla showrooms are being vandalized in different parts of the United States, Tesla cybertrucks have been set on fire in Seattle, its sales are down in the US as well as in Europe. That President Trump has bought a Tesla car might seem like good news, consisting of support at the highest level. But that might only serve to worsen Tesla’s fortunes.
The key problem underlying Tesla’s woes is the conflict between the social intelligence underpinning the sale of electric vehicles and the society-agnostic vision of tech-driven progress that Musk stands for. Social imagination is definitely getting the better of technological aspirations.
In the US, the people who are willing to invest in an electric car tend to be those who are willing to take on a certain amount of personal inconvenience in the service of the larger public good. Electric cars are relatively more expensive than conventional internal combustion engine cars, and come packed with all the attendants anxieties of whether the driver would be stuck on the road in a traffic jam, with their vehicle drained of charge, and concerns about about how far the car can go, even without getting stuck in a traffic jam that drains the battery without moving ahead on the road.
Those who are willing to take on these risks, and pay extra to buy the car, are those who care for the climate, believe in the ability of technology and human ingenuity to solve society’s problems, with the help of supportive government policy and, if needed, government funds. In the US, such people are Democrats.
Before Tesla boss Elon Musk hitched his wagon firmly to President Trump’s Make America Great Again (MAGA) platform, donating $288 million to the Trump campaign and making public appearances wearing a MAGA cap, 23% of Democrats said they were willing to buy Teslas, while the proportion of Republicans ready to buy electric cars was 15%. Now, liberals who had purchased the car are trying to sell their cars or driving around with bumper stickers that proclaim the car was bought before Elon Musk went crazy, according to the Wall Street Journal.
Now more Republicans say they are willing to buy electric cars, but view the entire Green Transition with suspicion, climate change, in their view, being little more than a liberal conspiracy. Trump has removed Biden’s electric car mandate, after assuming office, but now says the government will buy a number of Tesla cars. The slogan, Drill, baby, drill, rides on the passenger seat of an electric car with distinct unease.
Republicans who have bought into Trump’s anti-immigrant narrative are wary of Musk’s championing of immigrants with tech talent on H1B visas.
Tesla sales have gone down 7% in the US, and by a similar proportion in Europe. The drop in sales would have been vicious, if Biden had not slapped an import duty of 100% on electric cars from China. Chinese e-vehicles are not just way cheaper, but also technologically ahead of the competition, in terms of battery chemistry and battery weight.
Musk’s role in downsizing government staff and cutting budget outlays that slash demand for farm produce reliant on purchase by foreign aid programmes of the US government, both stemming from his actions at the Trump administration’s Department of Government Efficiency, has invited considerable popular resentment against an unelected tycoon’s role dismantling the government as they knew it.
Tesla’ attempt to break the union at its Swedish plant has been met with boycotts across Scandinavia. Elon Musk’s recent fulminations against mainstream Europe’s liberal consensus and his vocal support for Germany’s far-right party, the Alternative für Deutschland, which most Germans consider to be a modern reincarnation of the Nazis, has led to mass resentment against Musk and his car company. Britons have not taken kindly to Musk’s support for Britain’s far-right party, Reform UK.
Even as Trump’s political proclivities militate against the popularity of Tesla, other carmakers are rolling out their own electric vehicles, apart from the Chinese electric vehicle majors. Toyota is set to roll out seven new EV models in Europe.
In the meantime, Musk has scrapped a planned, low-cost – the price-tag of $25,000 being considered low-cost in Musk’s universe – model from Tesla. His focus is now on how to make wholly driverless models, for which he anticipates huge demand in the taxi market. His driverless technology relies on multiple camera inputs and their processing by artificial intelligence. Google subsidiary Waymo’s driverless technology makes use of multiple inputs apart from cameras, Lidars, for example. The efficacy of Tesla’s driverless technology, in comparison with those of rivals, is yet to be established.
The reaction against the Tesla boss’s politics is redounding on Tesla sales, and hurting the company’s share prices. Whether this would lead Tesla shareholders to seek Musk’s replacement with a politically anodyne boss remains to be seen.