Analysis of Business Insights and Market Implications

What Happened

• Date: October 29, 2023 (one week before Election Day)
• Action: CFM Advocates added Tesla Inc. as a client, with lobbyists Dale Penn II, Jessica Adamson, and Waylon Buchan informing the Oregon Government Ethics Commission.
• Partnership: CFM began supporting Tesla in partnership with Crosswater Strategies, which has lobbied for Tesla since 2015.

The Players Involved

• CFM Advocates: A well-established lobbying firm founded in 1990 by Gary Conkling. Known for handling complex public policy issues.
• Clients of CFM:
  • Local governments (e.g., Portland Public Schools, cities of Beaverton, Tigard, Sherwood).
  • Healthcare giants (Providence and PeaceHealth).
  • Industry associations (Oregon Solar Energy Industries Association, Oregon Public Broadcasting).
• Tesla: Electric car manufacturer led by Elon Musk. Facing backlash due to its role in federal agency cuts under the Department of Government Efficiency (DOGE).

Why It Matters

• Conflict of Interest Concerns:
  • Critics argue that CFM’s representation of Tesla creates a conflict with its public-sector clients, as DOGE cuts could harm education, housing, and environmental programs.
  • James Browning of F Minus claims this is self-defeating for local governments.
• CFM’s Response:
  • Dale Penn II asserts no conflict, stating CFM represents diverse clients without overlapping interests.
  • CFM focuses on promoting electric vehicle adoption and decarbonization in Oregon, separate from federal policies.
• Public Perception:
  • Adds political cover for Tesla at a time of reputational damage due to DOGE cuts and Trump administration policies.

What Tesla Wants

• Focus Areas:
  • Advocating for House Bill 2127, which restricts auto manufacturers from charging for subscription services using installed components.
  • Seeking exceptions for Tesla’s subscription model central to its business.
• Activities:
  • Work session held on March 25, 2024, in the House Committee on Commerce and Consumer Protection.

Market Implications

• Competitive Dynamics:
  • Tesla’s lobbying efforts could influence EV adoption and charging infrastructure in Oregon, impacting competitors in the automotive and energy sectors.
• Regulatory Impact:
  • Potential changes to auto industry pricing models under HB 2127 could reshape market competition and consumer costs.
• Long-Term Effects:
  • Success of Tesla’s lobbying may accelerate EV adoption but risks alienating public-sector clients if DOGE cuts materialize.

Strategic Considerations

• Reputational Risk:
  • CFM’s association with Tesla may harm its standing with public-sector clients concerned about alignment with Musk’s federal policies.
• Strategic Alliances:
  • Partnership with Crosswater Strategies positions Tesla for stronger lobbying efforts in Oregon, potentially offsetting national backlash.

Conclusion

The addition of Tesla to CFM Advocates’ roster highlights the complexities of balancing corporate and public interests in lobbying. While CFM claims no conflict, the move raises concerns about potential impacts on local governments and sets the stage for ongoing regulatory and competitive dynamics in Oregon’s EV market.