Elon Musk might attend Trump's tech summit - here's what he should talk about

Reuters/Mike Segar

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

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

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According to the Recode report, Musk hasn't accepted or declined the invitation yet. Tesla did not immediately return Business Insider's request for comment.

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

Solar subsidies

Tesla

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 a deal worth roughly $2 billion in late November.

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 to the reality of climate change was when he said there was "some connectivity" between human activity and climate change in an interview with New York Times editors.

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 that was partially funded by the EPA.

Musk has said the fate of solar subsidies wouldn't matter for Tesla's solar roof business because the roof will 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 question-and-answers session with shareholders following the vote to acquire SolarCity.

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

Electric car credits

(AP Photo/Marcio Jose Sanchez, File)

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

The ZEV mandate is run by the California Air Resources Board (CARB) 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, such as Maryland and Maine.

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

Because there's an oversupply of ZEV credits on the market, Musk claims 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 them out.

However, it is worth noting 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, it is a source of income for Tesla.

Then there's the matter of the $7,500 federal tax credit for those 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 electric vehicle adoption grows or falls dramatically.

The bottom line

There's plenty of other topics tech executives will likely hope to touch upon during the meeting with Trump.

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

So whether topics like solar or EV subsidies would even get dedicated air time is debatable. Also, whether Musk will even choose to attend is up in the air.

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