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Elon Musk: Keep your friends close and your enemies closer
Posted on August 16, 2018 by Matt Pressman
Wait, huh? Elon Musk is teaming up with Big Oil to expedite the future of electric vehicles? This doesn't make any sense. Nevertheless, Bloomberg's Tom Randall tries to sort out the latest news on taking Tesla private as he questions if "Elon Musk’s vast oil conspiracy ends with Saudi billions."
Above: Tesla CEO Elon Musk (Flickr: Samferdselsdepartementet)
According to Randall, "Elon Musk has always hated the fossil-fuel industry. His stated mission for Tesla Inc. is to hasten its demise... But now, in his bid to take Tesla private, Musk is courting billions of oil dollars." In addition, "Musk said in a blog post on Monday that he’s been in talks with Saudi Arabia 'going back almost two years.'"
Yet in June, Musk sent an email to staff claiming: "The oil and gas companies, the wealthiest industry in the world—they don’t love the idea of Tesla advancing the progress of solar power and electric cars. Don’t want to blow your mind, but rumor has it that those companies are sometimes not super nice."
And, "a month earlier, Musk had attacked the credibility of journalists by arguing that the media industry was beholden to fossil-fuel advertisers." Last year, Musk was on record as saying, “We need to appeal to the people and educate them to sort of revolt against this and to fight the propaganda of the fossil fuel industry, which is unrelenting and enormous.”
Above: Tesla (Image: Teslarati)
Regardless, it makes sense for the Saudis to hedge against the threat of a declining oil industry by investing in the clean energy poster child, Tesla. After all, Randall writes, "A bigger investment to help take Tesla private would hand some part of the operating control of the world’s biggest electric-car maker over to one of the world’s top oil producers. That’s the kind of shadowy influence that Tesla’s chief executive officer might have once framed as a threat."
So what's really happening here? Zachary Shahan at CleanTechnica points out, "Elon made it clear (in a polite way) that this is not entirely a partnership of choice. PIF [Saudi Arabia’s sovereign wealth fund] made several attempts to convince Musk to go private with its help, and when he repeatedly ignored the courting, the fund simply decided to start sucking up shares on the open market — something it could do up to a very high level over time if it so chose."
Shahan says, "In other words, PIF was going to jump into bed with Tesla no matter what, and the question now is whether Tesla decides to make sure the subsequent grinding is on Tesla’s terms or not." As the media scrambles to figure this out, an animated Jim Cramer (see below, via CNBC) acknowledges that they're having a hard time getting concrete answers.
Above: Jim Cramer, a frequent Tesla critic, is flustered by Elon Musk and all the mystery surrounding this deal (Youtube: CNBC Television)
The Financial Times once said that trying to out-think the Tesla CEO was like playing "eight-dimensional chess with Elon Musk." My two cents: there's a lot more going on here than meets the eye. Faced with the possibility of a partnership with Big Oil, Tesla could move in a multitude of different directions. Is Musk handling this like The Godfather of clean energy? Or, is he helping the Saudis hedge their biggest cash cow? Only time will tell.