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During a briefing in Davos last week, SA Deputy President Cyril Ramaphosa made a glowing reference to Pretoria-born super entrepreneur Elon Musk. He suggested his Government might tap into the California-based billionaire’s genius. Unfortunately, Cyril is behind the curve. Musk is getting ever closer to the new President of his adopted country, having twice met with Donald Trump since November. He has also been officially appointed to a Trump advisory panel. This comes as a surprise to media pundits who remind us that Musk spoke out publicly against Trump’s candidacy and is a fierce advocate of addressing global warming – something Trump and many of his supporters regard as a hoax. Musk’s twitter endorsement of the US’s new Secretary of State Rex Tillerson also shocked some. Us not so much. For one thing, Musk is close to Peter Thiel, with whom he cofounded Paypal and Thiel was close to Trump long before his surprise election victory. For another, despite the picture some are trying to paint, any neutral observer will quickly realise Tillerson is a man of honour and integrity. So why wouldn’t Elon endorse him? Also, Trump is disrupting politics in the same way as Musk has disrupted the motor, space and solar power industries. That aligns them more closely than their differences might suggest. We live in a complicated world where complex personalities rarely fit into the superficiality of media punditry. – Alec Hogg
@TheEconomist This may sound surprising coming from me, but I agree with The Economist. Rex Tillerson has the potential to be an excellent Sec of State.
— Elon Musk (@elonmusk) January 24, 2017
(Bloomberg) – Apparently you can put a price on being a strategic adviser to a president.
Morgan Stanley analyst Adam Jonas expects shares of Tesla Motors Inc. to surge 30 percent this year – and one of the reasons is the relationship between CEO Elon Musk and President-elect Donald Trump.
“Elon Musk has an important line of communication to Donald Trump through his role as a strategic adviser to the President-elect,” he wrote in a new note. “While we cannot explicitly apply a monetary value to this relationship, we believe this level of coordination with the new administration could actually evolve into greater strategic value than with the prior administration.”
Bringing manufacturing jobs back to the U.S. has been a focus point for Trump throughout his campaign and in the weeks leading up the the inauguration. While some on Wall Street are skeptical of the effort because technological advancements have made many industry positions obsolete, Jonas believes that Tesla could benefit from Musk’s role in helping Trump.
“To the extent the creation of high tech manufacturing jobs in the United States is a high priority of the administration, we believe Mr. Musk might have some objectives that could be very much in alignment with those of the Trump administration,” Jonas writes.
Shares of Tesla initially fell following Trump’s surprise victory in November, but they’ve risen since then, as fears about how new clean energy regulations might affect the environmentally focused company have calmed.
Jonas also believes Tesla will benefit from the coming launch of the Model 3 – which is ahead of schedule with more units than previously forecast – the increasing popularity of electric vehicles, and reduced competition from other technology firms.
Of the analysts covering Tesla, eight have buy ratings, 10 have holds and six have sells. Their average price target is $244 per share.
(Bloomberg) – President Donald Trump told the chief executives of the three biggest automakers in the U.S. that he’ll cut taxes and reduce environmental regulations to restore the nation’s manufacturing sector.
“We’re bringing manufacturing back to the U.S. bigly, we’re reducing taxes, very substantially, and we’re reducing unnecessary regulations,” Trump told reporters Tuesday, seated between the CEOs of General Motors Co. and Fiat Chrysler Automobiles NV and across a table from the head of Ford Motor Co.
The remarks reflect the sweeteners Trump will try to use to get U.S. automakers building new factories at home, and the automakers’ shares rose. The last vehicle assembly plant GM, Ford or Fiat Chrysler opened on their home turf was 2006, around the time the companies began to shuttering facilities across the country. Those restructurings fell short of keeping GM and Fiat Chrysler’s predecessors out of government-backed bankruptcies.
“I am, to a large extent, an environmentalist,” Trump told GM’s Mary Barra, Ford’s Mark Fields and Fiat Chrysler’s Sergio Marchionne. “I believe in it. But, it’s out of control.”
Trump’s pledge to ease off on environmental rules and taxes would blunt any impact of his plans to renegotiate U.S. trade policy with its neighbours. After spending roughly a year and a half attacking Ford in particular for building cars in Mexico, the president has stood firm with opposition to auto imports.
Fiat Chrysler, whose truck-heavy line-up had left it vulnerable to concerns about meeting future clean-air standards, led automotive stocks higher. Its U.S. shares rose 6.4 percent a 12:30 p.m. in New York, while GM and Ford each gained less than 2 percent.
The White House summit was just the latest in a series of meetings this week where Trump has called for bolstering the U.S. manufacturing sector. His reiterated desire to reduce regulations may indicate a willingness to scale back federal fuel-economy standards.
“We had a very constructive and wide-ranging discussion about how we can work together on policies that support a strong and competitive economy and auto industry, one that supports the environment and safety,” GM’s Barra said in a statement.
Trump’s meeting occurred a day after he signed a memorandum withdrawing the U.S. from the Trans-Pacific Partnership trade agreement, claiming the pact would hurt workers. He has pledged to renegotiate the North American Free Trade Agreement with Mexico and Canada.
“We’ve repeatedly said that the mother of all trade barriers is currency manipulation, and TPP failed in meaningfully dealing with that,” Ford’s Fields, who also met with Trump on Monday, told reporters following the meeting. “We appreciate the president’s courage to walk away from a bad trade deal.”
The last new vehicle assembly plant GM, Ford or Fiat Chrysler built in the U.S. was GM’s Lansing Delta Township, opened about 11 years ago. The factory makes Chevrolet Traverse, GMC Acadia and Buick Enclave SUVs.
“I appreciate the president’s focus on making the U.S. a great place to do business,” Fiat Chrysler’s Marchionne said in a statement. “We look forward to working with President Trump and members of Congress to strengthen American manufacturing.”
Trump’s meeting on Monday with prominent American manufacturers included Elon Musk, the head of Tesla Motors Inc. and Space Exploration Technologies Corp. Trump said then he’d dramatically cut regulations and corporate taxes, while warning manufacturers will face stiff penalties if they move production outside the country.
All three of the top U.S. automakers have given Trump fodder for promoting his efforts to boost U.S. hiring. Ford canceled a $1.6 billion car assembly plant in Mexico and has said it will spend $700 million to expand a Michigan factory instead.
GM and Fiat Chrysler have each pledged $1 billion in investment toward domestic assembly, though both companies have said their plans were made prior to Trump winning the election.
All three also continue to produce vehicles in Mexico. Ford will assemble Focus compacts at an existing factory in Hermosillo already building Fusion and Lincoln MKZ sedans.
GM hasn’t announced any step back from plans announced in late 2014 that it would spend $5 billion on new plants in the country by 2018, creating 5,600 jobs. Fiat Chrysler has seven facilities south of the border building parts as well as Ram trucks and vans, Fiat 500 small cars and Dodge Journey sport utility vehicles.
In November, the Alliance of Automobile Manufacturers sent an eight-page letter to the Trump transition team with a series of recommendations, including aligning the Environmental Protection Agency and the National Highway Traffic Safety Administration. Inconsistent rules threaten the industry with “potentially billions of dollars in fines,” said the trade group, which represents most of the world’s biggest automakers including GM, Ford, Toyota Motor Corp. and Volkswagen AG.
The alliance asked for a presidential panel to review all auto regulations, including fuel-economy rules, citing consumer rejection of efficient cars and electrified vehicles and embrace of pickups and SUVs.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.