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President Trump could veto Elon Musk’s private plans for Tesla

The President’s new FIRRMA bill gives the Committee on Foreign Investment in the United States (CIFUS) sharper teeth. This legislation may put a spanner in Elon Musk’s plans to take his company into private ownership via overseas investment.

Applying the brakes

In a turbulent month for Musk, he found himself under federal investigation for his infamous ‘funding secured’ tweet. His personal health also came under question, due to revelations over his staggering workload. Now CIFUS may put the brake on a potential $72 billion buyout from the Saudi Arabian Public Investment Fund (PIF). President Trump has been vocal in protecting US commercial interests by preventing foreign access to domestic technology. Earlier this year, he outlawed the $117 billion hostile takeover of US chipmaker Qualcomm by Singapore-based rival Broadcom.

Eye of the storm

Notwithstanding its private SpaceX sister company, Tesla has hardware aplenty that Trump would want to keep from prying eyes. Its self-driving technology, along with expertise in long-range lithium batteries, solar panels, driver data and importantly, artificial intelligence, could merit unwanted state protection.

Whilst Tesla cars are more than smoke and mirrors, rumour swirls around the enigmatic owner like a propaganda tornado. Although the speculation regarding Saudi investment may be just that, Musk knows the benefits of private ownership. It would diffuse the strained public relations between himself and the stock markets. Furthermore, the constant pressure of defending the shortfalls in Tesla’s car production targets and its catastrophic short-term losses would be diminished. The share price could stabilise and company growth may flourish, away from feverish opinion. Whether Elon Musk could stay out of the media spotlight remains to be seen.

Additionally, future Tesla expansion might involve a production facility in China and a multi-billion private injection of funds would help to finance such a project. Yet, fraught US-Chinese trade relations and CIFUS regulations will make success difficult. This strategic battlefield could see Tesla and its enigmatic CEO remain in the public arena for the foreseeable future.

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