Elon Musk, the CEO of Tesla, was disappointed with what he heard from President Joe Biden at the State of the Union speech. The president applauded the work of Ford Motor and General Motors to electrify their vehicles, but he did not name Tesla again.
It wasn’t the first time someone had turned them down. Since taking office, Vice President Joe Biden has frequently praised electric vehicle innovation at General Motors (GM) and Ford (F), but he has never mentioned that Tesla (TSLA) is the American-born company that is largely responsible for pushing the entire global auto industry toward battery-electric vehicles.
Musk seems to have been more irritated by the growing number of omissions, as seen by his tweeting out his own investment numbers on Tuesday night. The administration’s sluggish response to Tesla’s pseudo-battle with the company amounts to a little distraction for investors. This raises the issue of who has the most effect on a nation’s industrial base: the fastest-growing, most inventive enterprises, or the largest corporations with the most resources?
When discussing the resurgence of American industry, Vice President Joe Biden singled out General Motors and Ford, saying, “Companies are choosing to build new facilities here, when just a few years ago, they would have gone offshore.”
Tesla seems to be the leader in electric vehicle investment in the United States. Tesla is the firm that sells the most electric vehicles in the United States, and it only offers electric vehicles. Tesla expects to spend around $7.7 billion on facilities and equipment in 2021, with an additional $2.6 billion allocated to research and development. That comes to a total of $10.3 billion.
Those are significant numbers, but General Motors and Ford are still far bigger corporations. Ford employs around 183,000 people globally, with 88,000 of them working in the United States. Ford will invest $6.2 billion in factories and equipment in 2021, as well as $7.6 billion in research and development.
GM, on the other hand, employs 155,000 people worldwide, including 85,000 in the United States. In 2021, General Motors will spend $7.5 billion on factories and equipment, in addition to $7.9 billion on research and development.
The clear majority of Ford and General Motors employees work on gasoline-powered automobiles. Furthermore, the bulk of Ford and GM expenditure is directed toward the legacy car industry. Both, on the other hand, have ambitious ambitions for electric vehicles. Ford and General Motors have committed a total of almost $65 billion to car electrification over the next several years.
According to preliminary calculations, General Motors and Ford are spending around half of their yearly capital and research and development investment into electric vehicles, or approximately $12 to $14 billion each year for the next several years.
If that’s the case, Ford and General Motors may be spending more money on electric vehicles than Tesla combined. Even though Musk’s arithmetic may be a little wrong, he is unlikely to notice. This is all simply for entertainment purposes with statistics, after all.
Furthermore, most of the money spent by General Motors and Ford on electric vehicles will be spent in the future. Tesla’s expenditures have already taken place.
In his tweet, Musk did not claim credit for any of the EV expenditures that Ford and General Motors are about to undertake. He very likely could. Tesla is the single most important reason this is taking place.
If so, Ford and GM may be spending more on EVs than Tesla. Musk’s calculations may be incorrect, but he doesn’t care. It’s all simply for statistics’ sake. Moreover, most GM and Ford EV expenditure is planned.
Tesla has already spent. Musk didn’t mention any of the EV expenditures Ford and GM are planned. He may. Tesla business model is the main driver.