"Elon Musk Directly Says 'US Should Leave NATO'... Is He Ignoring the Electric Vehicle Market? [AK Radio]"

Musk: "No Reason to Pay for Europe's Defense"
Tesla Sales Plummet... Focus Shifts to Robotics Industry

Elon Musk has sparked controversy by posting on his social media platform X (formerly Twitter) that "the United States should withdraw from the North Atlantic Treaty Organization (NATO)." While he has indirectly expressed similar views before, this is the first time he has directly mentioned leaving NATO.

Musk's remarks carry more weight than before, as he is a close ally of President Trump and has been appointed as the head of the government's efficiency department. President Trump has repeatedly suggested that the U.S. might leave NATO if member countries do not increase their defense spending, but Musk went further, stating, "What reason does the U.S. have to be in NATO? Why should we pay defense costs?" expressing a more hardline stance.

This statement is expected to further worsen anti-Musk sentiment in Europe. For Musk, CEO of the electric vehicle company Tesla, Europe is the second-largest market after China. However, since Musk officially supported the far-right party 'Alternative for Germany (AfD)' in the German federal election earlier this year, a Tesla boycott movement has spread across Europe. Tesla sales in Europe dropped by 46% year-on-year in January, and in some countries, arson attacks on Tesla dealerships have even occurred.

Typically, a company CEO would attempt to explain or mitigate a boycott, but Musk instead made statements that provoked European anger. Some analysts are even suggesting that Musk might be planning to abandon the electric vehicle business. In October last year, Musk announced the cancellation of the launch plan for the new low-cost electric car 'Model 2.' At that time, the prevailing view was that Tesla would not give up the entire electric vehicle market, but combined with this recent statement, there is speculation about a possible long-term strategic shift.

On the 8th (local time), citizens in Georgia, USA, are holding an anti-Tesla protest. Photo by EPA and Yonhap News.

Recently, news emerged that Volkswagen has overtaken Tesla to become the number one in the global electric vehicle market. Chinese electric vehicle brand BYD also controls a significant portion of the market, making Tesla's market expansion even more challenging.

The new focus area for Tesla appears to be the robotics industry, including autonomous robot taxis and household robots. Tesla has been actively promoting its humanoid robot 'Tesla Bot' and is preparing to launch advanced autonomous robot taxis.

This sector has been heavily regulated by the U.S. government since the Biden administration, which has imposed strict semiconductor export controls to prevent China from acquiring advanced semiconductor chips and processing equipment. As a result, China faces difficulties entering the autonomous robot taxi and household robot markets. Musk seems to view this sector as a 'blue ocean' with limited competition from Chinese companies and is interpreted as shifting focus from electric vehicles to robotics.

This strategic shift is causing concern among Tesla shareholders. Tesla's stock price rose to $479 in December last year but has since nearly halved to the low $260s. This is almost a complete loss of the gains made after President Trump's election on November 6 last year, when the stock was around $280.

On the 9th (local time), Elon Musk, head of the U.S. Department of Government Efficiency (DOGE), emphasized his T-shirt with 'DOGE' written on it during a press conference held at the White House. Photo by AP and Yonhap News

Another concern for investors is the potential decline in Tesla's revenue from carbon credit sales. Tesla has sold carbon credits, earned proportionally to its electric vehicle sales, to internal combustion engine vehicle manufacturers in the U.S. and Europe. This revenue amounted to $7.1 billion last year, accounting for about 38% of Tesla's annual net profit.

The Tesla boycott in Europe is becoming increasingly aggressive. In Germany, Tesla sales have dropped by 76% year-on-year, and existing Tesla owners are putting their cars up for sale in the used car market. There is even analysis suggesting a kind of social stigma in German society, where Tesla owners are perceived as having far-right tendencies.

In this situation, if the U.S. actually pursues withdrawal from NATO, there is growing concern that it could completely lose Europe, the world's second-largest consumer market. However, since NATO withdrawal requires a two-thirds majority approval in the U.S. Senate, the feasibility is considered limited.

The Trump administration is gradually recognizing the economic losses from losing the European market, raising expectations for changes in future policies toward Europe. Considering the U.S.'s global strategy and relations with China and Russia, NATO withdrawal is not a simple issue, and close attention to future developments is necessary.