Elon Musk might attend Trump's tech summit — here's what he should talk about (TSLA)

Reuters/Mike Segar

Tesla CEO Elon Musk may attend President-elect Donald Trump's tech summit this Wednesday alongside tech executives such as Apple CEO Tim Cook and Alphabet CEO Larry Page.

The Wall Street Journal, citing sources familiar with the matter, reported on Sunday that Musk would attend the meeting in New York. However, Musk may skip the event because of critical work obligations, Recode reported Monday morning.

Musk is planning to attend the event, a source familiar with the matter told Business Insider.

It's unclear what will be covered at the meeting, but there are a few ways a Trump presidency could affect Musk's businesses.

Solar subsidies

Reuters/Mike Segar

Tesla has entered the solar business at a risky time under Trump, and Musk may look to get more details on the fate of solar subsidies.

Tesla officially acquired SolarCity in late November in a deal worth roughly $2 billion.

As part of the merger, Tesla will sell a brand-new solar roof product that will be produced at a factory in Buffalo, New York. Tesla will also offer traditional solar panel installation while selling its other energy products, the Powerwall 2 and Powerpack 2.

Musk's SolarCity acquisition is part of his ultimate goal to use Tesla to accelerate the world's transition to sustainable energy to limit the effects of climate change.

Trump has yet to acknowledge that global warming exists. The most Trump has admitted about the reality of climate change was when he said in an interview with New York Times editors that there was "some connectivity" between human activity and climate change.

But past Trump statements on climate change include his assertion that global warming is a hoax perpetrated by the Chinese. He also chose Oklahoma Attorney General Scott Pruitt, a climate change denier, to lead the Environmental Protection Agency. Pruitt is suing the EPA over the Clean Power Plan.

None of that bodes well for the fate of solar subsidies — something solar companies have relied on to make the high cost of panel installation more attractive. Musk also has relied on EPA funding for past projects, like Tesla's Ta'u solar project.

Musk has said the fate of solar subsidies wouldn't matter for Tesla's solar roof business because the roof would likely cost less than a normal roof.

"Assuming it pans out that we are able to do a solar roof [for] less than a normal roof, before you even take into account the value of the electricity. Assuming that pans out, well subsidies don’t even matter," Musk said in a Q&A with shareholders following the vote to acquire SolarCity.

But Musk may want greater clarity about how Trump plans to proceed with subsidies and the Clean Power Plan going into 2017.

Electric-car credits

Reuters/Mike Segar

Trump's stance on climate change has led many to believe he could put pressure on California to abolish its zero-emission vehicle, or ZEV, mandate.

The ZEV mandate is run by the California Air Resources Board and requires automakers to sell a certain number of zero-emissions vehicles or risk a fine. Automakers who are unable to earn enough ZEV credits toward compliance can choose to buy the credits from other companies.

The mandate has been adopted by nine other states, including Maryland and Maine.

Musk has been vocal about the elimination of ZEV credits, saying it wouldn't hurt Tesla. That's because as an automaker that exclusively sells electric vehicles, Tesla consistently has a surplus of ZEV credits to sell compared with other automakers.

Because there's an oversupply of ZEV credits on the market, Musk says Tesla usually only makes "50 cents on the dollar" when it sells ZEV credits. The amount Tesla made from selling ZEV credits in the second quarter was so negligible that Tesla didn't break it out.

However, it s worth noting that when Tesla reported its third-quarter earnings — its first quarterly profit since 2013 — Tesla made $139 million from selling ZEV credits. So even if Tesla isn't fully reliant on ZEV credits, that's a source of income for Tesla.

Then there's the matter of the $7,500 federal tax credit for people who buy or lease an electric car. EV sales have yet to gain real traction, and federal incentives help attract buyers who could be dissuaded by the generally higher ticket price of electric cars.

Whether Trump plans to eliminate or alter these incentives could determine whether EV adoption increases or falls dramatically.

The bottom line

There are plenty of other topics tech executives will likely hope to touch on during the meeting with Trump.

For example, Trump has called to move smartphone manufacturing to the US and for changes to the tax code.

So it's debatable that topics like solar or EV subsidies would get dedicated airtime. Also whether Musk will even choose to attend is up in the air.

But a Trump presidency could affect Tesla in quite a few ways, and Musk could gain a lot by asking about the future of government subsidies.

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