Tesla is joining California and other states in a lawsuit against the Trump administration to reinstate former President Barack Obama’s steep fuel-efficiency standards.
Maintaining Obama’s fuel-efficiency standards would increase demand for Tesla’s electric cars and spur demand for electricity — economists usually describe these types of activities as rent-seeking.
Tesla’s move comes after California announced May 1 a lawsuit against President Donald Trump when EPA Administrator Scott Pruitt promised in April to review a set of Obama-era efficiency rules the auto industry considers too burdensome. (RELATED: California Sues Trump’s EPA Over Move To Ding Obama-Era Fuel Efficiency Rules)
Pruitt’s plan would also target California’s ability to set its own efficiency standards. The state’s rules have forced automakers to build more fuel-efficient vehicles, which ultimately affects national efficiency standards.
Tesla’s credit has gotten racked as the company continues missing crucial deadlines.
Moody’s dropped Tesla’s credit rating in March and changed the company’s outlook to negative as the fledgling Model 3’s production dwindles while the automaker’s financial situation grows dim. (RELATED: ‘Unusual’: Elon Musk Appears To Have Nervous Breakdown During Bizarre Tesla Earnings Call)
Tesla will need to raise more money in the near future to meet its cash needs, the credit rating agency claimed. Moody’s labeled the electric car marker a substantial risk for investors willing to dive headfirst into the auto market.
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