Tesla, the world’s largest manufacturer of electric vehicles (NASDAQ:TSLA) and perhaps the one company most firmly associated in the public eye with the idea of a future filled with them, was nowhere to be seen at the high-profile Aug. 5 press event at the White House, designed to tout the White House program to promote electric cars.

Executives from General Motors (NYSE: GM), Ford (NYSE: F), and Stellantis (NYSE: STLA) were all present. The former two names are of course in household parlance, Stellantis is not yet. But Stellantis is the consequence of a merger earlier this year of Fiat Chrysler and PSA.  

Tesla’s snub might seem at first a mystery. After all, Stellantis isn’t selling any pure EVs on US soil at present. It has big plans but, as yet, no cars. So far in 2021, EVs have accounted for only 1.5% of GM’s sales, and only 1.3% of Ford’s. 

Indeed, although Ford manufactures the Mach-E electric crossover, it doesn’t make them in the United States, but in Mexico. 

For Tesla, on the other hand, EVs represent 100% of vehicular sales. They represent the central business model of the company.  So was Tesla’s absence from an event carefully choreographed by this administration a deliberate snub? 

Why Wasn’t Tesla Invited?

That question was the subject of an exchange at the pre-event briefing by President Biden’s press secretary, Jen Psaki.

Psaki said that the administration welcomes the efforts of all automakers “who recognize the potential of an electric vehicle future … and certainly Tesla is one of those companies.”

Pressed on whether Tesla’s absence is related to the fact that Tesla is a nonunion employer, she said: “Well, these [GM, Form, and Stellantis] are the three largest employers of the United Auto Workers, so I’ll let you draw your own conclusions.”  

Volkswagen was also unrepresented at the event, although it is due to start building an EV for the US market in a Chattanooga, Tennessee plant next year. The UAW has twice sought union representation at that plant, and it failed both times. It seems safe to infer that US EV policy under President Biden has a pro-union filter. 

Where Does Tesla Stand in August 2021? 

Despite that filter, and the resulting snub, the Biden policy may end up helping Tesla according to an analysis in The New York Times. 

The EU, the U.K., and China have all been promoting EV use heavily with combinations of regulations, consumer incentives, and subsidies. President Biden is now committed to a similar mix, and Tesla — which sells more than two-thirds of the battery-powered cars sold in the United States — stands to benefit whether Elon Musk gets to participate in photo ops or not. 

As a coincidence of timing, there are reports now that Tesla is entering into an unlikely partnership, a plan to buy “blade batteries” from a Chinese company, BYD, for delivery in the second quarter of next year. This is a new generation of battery that may have a lot to do with the course taken by the electric-car industry. 

In the second quarter 2021, Tesla reported more than $1 billion net income, and earnings per share of $1.45, which beat analyst expectations of just $0.98. Tesla’s overall automotive revenue for the quarter was $10.21 billion. 

Critics have sometimes knocked Tesla for relying too much on the sale of regulatory credits as a source of revenue. A regulatory system in California, like analogous systems in Europe, give credits to automakers depending on how many EVs they manufacture. Those who don’t manufacture a sufficient number of EVs to keep the regulators happy can avoid penaltiers by buying credits from those who manufacture more than enough. Since Tesla manufactures only EVs, it gets a lot of credits, and their sale is a nice sideline.    

But reporting a lot of income from those sales relative to one’s overall numbers makes for grouchy analysts, who would rather see revenue from the actual sale of one’s product.  

That is why it is important that, of Tesla’s $10.21 billion in revenue in 2Q, only $354 million of that (about 3.5%) came from the sales of regulatory credits.