Commerce Secretary Howard Lutnick Faces Backlash for Tesla Endorsements
In a bold move, Commerce Secretary Howard Lutnick has come out in favor of Tesla (NASDAQ:TSLA) and its iconic CEO, Elon Musk, during a recent television appearance. His statements have ignited a firestorm of criticism, particularly from ethics experts and investors. Notably, even prominent Tesla enthusiasts, such as Gary Black, have voiced concerns.
Praise for Elon Musk and Tesla
During an appearance on Fox News, Lutnick did not hold back in his praise for Musk, claiming he is “probably the best person to bet on I’ve ever met.” He described Tesla stock as significantly undervalued, urging viewers to invest while they can. Lutnick declared, “It’ll never be this cheap again,” and suggested that future investors will come to regret their hesitation in purchasing Tesla shares.
The Optimus Project
Lutnick went a step further by highlighting Tesla’s upcoming humanoid robot, Optimus, which he stated would retail for approximately $30,000. He remarked, “Anybody who does not have a Tesla robot will be silly,” adding an enthusiastic prediction about what the robot might be capable of, including mowing lawns and making coffee.
Promoting the Future: Cybercab
In addition to Optimus, Lutnick also promoted Tesla’s ambitious robotaxi project, known as Cybercab, implying that both products will soon become integral parts of everyday life.
Elon Musk’s Cautionary Note
However, even Musk himself has recently attempted to manage expectations surrounding these products. He indicated via social media that a $30,000 price point may only be feasible in the long term, contingent upon Tesla reaching production levels of over one million units annually. The specifics of whether this target applies to Optimus, Cybercab, or both remain unclear.
Ethical Concerns Emerge
As enthusiasm for Lutnick’s declarations grows, so too does skepticism from ethical onlookers. Various watchdog organizations have publicly expressed concern regarding the implications of Lutnick’s public endorsements of Tesla.
The Ethics Committee Speaks Out
Jordan Libowitz, the communications director at Citizens for Responsibility and Ethics in Washington, explained, "It’s an ethics issue and an optics issue." He emphasized that when significant financial contributions are made to support a president’s campaign, any moves that seem to uplift that donor’s financial situation can appear suspect.
A Call for Caution
Richard Painter, former ethics counsel under President George W. Bush, reinforced this perspective, stating bluntly, “The Commerce Secretary is not Jim Cramer,” indicating that Lutnick’s role and responsibility differ significantly from that of a television personality dispensing stock tips.
Trump’s Connection with Tesla
Adding another layer to this already complex scenario is President Donald Trump, who has frequently praised both Musk and Tesla, even recently posing with Tesla vehicles on the White House lawn.
A Mixed Response from Tesla Supporters
Even among staunch Tesla supporters, like Gary Black, there are warnings against overinflated expectations. Black, managing partner at The Future Fund, has estimated that selling 500,000 Optimus robots by 2027 would add merely $0.70 to Tesla’s earnings per share.
Managing Expectations
Black highlighted how every time he tries to moderate expectations, he faces backlash from enthusiastic Tesla supporters. He stated on social media, “TSLA has underperformed for the past three years because expectations were too high.” He underscored the significant drops in earnings estimates for 2025 and 2026, noting declines of 39% and 45%, respectively.
Financial Perspectives
Meanwhile, Bank of America has provided financial analyses suggesting that while the Optimus segment could be valued between $14 billion and $95 billion, greater long-term potential may lie in Tesla’s robotaxi and self-driving technology. Observing market dynamics, the bank posits that these technologies could ultimately account for as much as 75% of Tesla’s future value.
The Public’s Prerogative
Lutnick’s public promotion of Tesla and its projects raises critical questions about the responsibilities of government officials when making public endorsements of commercial products. The debate echoes broader conversations about the potential conflicts of interest and the ethics of mixing politics with business ventures.
Conclusion: Moving Forward
As the conversation evolves, it’s clear that the intersection of business, politics, and investment is fraught with complexity. Secretary Lutnick’s enthusiastic endorsements have not only sparked interest in Tesla’s innovations but also provoked scrutiny regarding the implications of such public backing. Moving forward, both investors and consumers will need to navigate these waters carefully, aligning their trust and expectations with the reality of technological developments and ethical considerations in governance.
