The ads are appearing in the Washington Post, The New York Times, and The San Francisco Chronicle, among others. They're airing on TV during Meet the Press and Morning Joe. Their message is clear: Elon Musk should cut ties with Donald Trump.

Doug Derwin is a venture capitalist and former attorney with a lot of money to spare. He's already paid for anti-Trump billboards near Tesla and SpaceX's California headquarters. In total, he's spent $500,000 on advertisements urging Musk to leave the president's economic advisory council, according to Bloomberg. And he's prepared to spend up to $2 million.

Like a lot of Americans, Derwin was shaken when Trump won on November 8. He was also surprised when Musk, a champion of sustainable energy, agreed to advise the president, who in the past has denied the existence of global warming and supported tax cuts and regulatory rollbacks for the oil and coal industries.

So what should Musk do? From a business standpoint, right now there doesn't seem to be any move smarter than maintaining the status quo. Tesla's stock reached its highest point on April 10 and has hovered there since--and the company is now more valuable than both Ford and GM. If some companies have suffered for their (real or perceived) support of the president, Tesla isn't one of them. The company's biggest challenge currently is keeping up with its vehicle orders.

Like any company, Tesla is subject to the potential consequences of angering a president who has shown the willingness to retaliate with tweets, like he's already done with Boeing, when a company executive questioned his tax policies, and Nordstrom, when it pulled Ivanka Trump's product lines. Meanwhile, the president also has cherry-picked companies to offer assistance to and then trumpet as victories (see: Carrier), so there's obviously a big benefit to staying on his good side.

This isn't to say Musk is being held hostage. It's not likely that an attack from Trump could have much effect on Tesla's bottom line. "I think [Musk's] brand can't be hurt by anything right now, with the exception of death from autonomous driving," says one energy industry analyst, who asked not to be named in this article because of his firm's media policy. "He has so much momentum. No one is punishing the stock price or brand because he's on Trump's committee. Sales aren't slowing."

Meanwhile, Trump has already begun the process of easing carbon emission standards for vehicles and could cut back on subsidies for electric vehicles. Musk has said he isn't worried about this, either--in fact, while he disagrees with such moves ideologically, he's said they would actually help Tesla from a business perspective, since traditional car makers derive greater benefits from electric-vehicle subsidies.

Using his influence

So if Musk isn't being pressured, and if his company is supposedly immune to any sort of policy changes, why take the risk of being publicly attached to Trump? The only logical explanation is the one Musk has already offered: So he can have the president's ear.

Since becoming president, Trump has slashed funding for the Environmental Protection Agency while staffing his cabinet with oil executives (Secretary of State Rex Tillerson) and climate change skeptics (EPA chief Scott Pruitt). He's also called for bans on immigration and tighter regulations on H1-B visas, policies that could have significant adverse effects on Silicon Valley companies. Many tech leaders have spoken out against the new policies, but very few have the chance to speak with the president about them in person on a quarterly basis.

Musk can have that pull. He's already floated the idea of a carbon tax and spoken to the president about immigration reform on some level. Adding to Musk's influence is the fact that he's adding thousands of jobs in the U.S., executing on a promise made by Trump himself. It's not hard to believe that Trump, whose ideas over time have fluctuated when convenient or fashionable, could be swayed--if only for the benefit of associating himself with a man who was recently named the most admired tech CEO in America.

Derwin, the VC who created the billboards, points out to Bloomberg that Trump hasn't yet enacted any policy as a result of conversations with Musk. But if Trump continues to see his poll numbers plummet--as well as strong challenges to Republican-held congressional seats, as is happening in Georgia's 6th District--that day might come.

Where Musk has to be careful, though, is in how he discusses the relationship publicly. He can look at Travis Kalanick as a case study. The Uber CEO's statement the day Trump issued the immigration ban was largely deemed not forceful enough, and the company's announcement that it wouldn't charge surge fares during a New York Taxi Workers Alliance strike at JFK Airport was interpreted as a crossing of the picket line. The result was a PR nightmare, a viral #DeleteUber hashtag, and a rally for Uber's biggest rival, Lyft. Kalanick ended up leaving Trump's council several days after issuing the statement.

Musk hasn't made any similar missteps, but he's come close. After Trump announced Tillerson, the former ExxonMobil CEO, as his pick for Secretary of State, Musk tweeted that "Tillerson has the potential to be an excellent Sec of State." The backlash was swift, with Twitter users combating Musk's view and reminding him that ExxonMobil for years deliberately misled the public about the existence of climate change.

A few more comments like that, and the perception of Musk's relationship with Trump can cross the line for Tesla's largely progressive, environmentally conscious customer base from "necessary evil" to "way too cozy."

"Kalanick bailed really quickly, but Musk thinks his brand is strong enough that he doesn't have to," says branding expert Bruce Turkel. "It remains to be seen if he's right or not." While a handful of customers, Derwin included, have canceled their car orders, the Tesla equivalent of #DeleteUber hasn't cropped up yet. But there's no guarantee that it won't, should Musk keep pushing the wrong buttons.

Turkel says Musk's explanation for wanting to remain on the council--that a president should have to hear opposing opinions--makes sense, but with a big caveat. "When you're explaining," he says, "you're losing." He points to the recent United Airlines incident, when the airline clarified afterward that it was trying to displace four passengers for the sake of 90, and that the security guards who removed the passenger weren't company employees. "That's all true," he says, "but what I remember as a consumer is that poor guy being dragged down the aisle with a bloody nose, screaming bloody murder."

As the recent Bill O'Reilly firing by Fox News reminded us, brands typically don't make business shifts out of principle--they do so when something is hurting their bottom line. Musk has a chance to speak with the president in an official capacity. Until that damages Tesla's revenue, don't expect that to change. But if you support the clean energy future that Tesla represents, maybe you shouldn't want it to.

Published on: Apr 24, 2017