How Elon Musk Stands to Benefit from Trump’s Presidential Victory

Key Points

• After a major investment of at least $130 million into a pro-Trump campaign effort, Elon Musk could see substantial benefits following Trump’s presidential win.
• Tesla shares surged 15% post-election, boosting Musk’s net worth by billions.
• Trump acknowledged Musk’s campaign support, calling him a “star” during his victory speech.

Tesla CEO Elon Musk (R) joins former U.S. President and Republican presidential candidate Donald Trump during a campaign rally at the site of his first assassination attempt in Butler, Pennsylvania, on Oct. 5, 2024.

 Close Alliance Between Elon Musk and Donald Trump

In the early hours of Wednesday, Donald Trump celebrated his presidential victory at his Mar-a-Lago resort, with Elon Musk standing beside him. During the celebration, Trump took a moment to recognize Musk’s efforts, calling him “a star” and thanking him for his role in the campaign. Musk’s support included a substantial $130 million investment in a pro-Trump campaign, voter registration efforts in key swing states, and frequent endorsements on his social media platform, X.

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Financial Windfall for Tesla and Musk’s Companies

Musk’s support for Trump has already translated into immediate financial gains. Tesla’s stock jumped 15% post-election, adding about $15 billion to Musk’s net worth. Although Tesla faces competitive challenges, particularly in China and Europe, Wall Street is betting that Trump’s promise to reduce regulations will benefit Musk and his businesses.

Tesla isn’t the only potential winner in Musk’s portfolio. Trump also praised SpaceX during his victory speech, recognizing Musk’s contributions to disaster relief efforts with Starlink, a satellite Wi-Fi network. With regulatory rollbacks and a more Musk-friendly administration, SpaceX, Tesla, and Musk’s other ventures could see a prosperous future.

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Regulatory Easing: A Potential Break for Musk’s Legal Woes

Musk’s companies, including Tesla, SpaceX, and X, are currently under multiple investigations by federal agencies. These involve alleged violations of securities laws, workplace safety, labor rights, environmental standards, and consumer protections. Given the executive branch’s power over these regulatory bodies, Musk could see a reduction or even termination of some investigations under Trump’s administration.

Public Appearances and Support for Trump’s Agenda

On October 27, Musk joined a pro-Trump rally in New York, where he was introduced by Cantor Fitzgerald CEO Howard Lutnick, who called Musk “the greatest capitalist” in U.S. history. During the rally, Musk proposed federal budget cuts of “at least $2 trillion” and criticized agencies like the SEC and the EPA, calling for more regulatory freedom for businesses. A Trump-led commission on government efficiency, with Musk’s involvement, could push for the elimination of regulations that Musk opposes.

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Musk’s Push for Federal Approval of Autonomous Vehicles

During a recent earnings call, Musk expressed his hope that Trump’s administration would introduce a federal approval process for autonomous vehicles. Currently, approval for driverless technology varies by state, which presents challenges for Tesla’s vision of autonomous driving. Musk’s lobbying efforts might create an opportunity for Tesla to gain a streamlined regulatory pathway to advance its driverless technology.

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Federal Support for SpaceX and Starlink

Since 2008, SpaceX has received over $19 billion in federal contracts, including work for NASA, the U.S. Air Force, and Space Force. With Trump’s backing, SpaceX could continue to secure these lucrative government contracts. Tesla has also benefited from environmental credits, which account for a significant portion of its net income. Although Trump has hinted at reducing these incentives, Musk’s close ties with the administration might allow Tesla to maintain its revenue from regulatory credits and federal rebates.

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Potential Risks and Rewards for Tesla’s Global Strategy

While Trump’s economic policies could favor Musk, they also come with potential risks. For instance, Trump’s proposed tariffs on Chinese imports could protect Tesla from Chinese competitors but may disrupt Tesla’s supply chain, which relies on parts and materials from China. On labor matters, Musk has sought to limit the National Labor Relations Board’s (NLRB) authority, and a Trump administration could reduce the NLRB’s power, potentially relieving Musk of legal battles over worker protections.

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Musk’s Controversial Engagements and International Relations

Musk’s actions in international affairs, particularly with Starlink, have raised concerns. Recently, he reportedly cut off Starlink access over Taiwan at the request of Russian President Vladimir Putin, which allegedly followed discussions between Putin and China’s Xi Jinping. U.S. officials have voiced concerns about Musk’s ties with Russia, with some suggesting that Musk’s interactions with foreign leaders could warrant investigation.

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Musk’s Long-Term Political Aspirations

Musk has stated his intention to remain actively involved in U.S. politics, not just through presidential campaigns but also in local elections. His super PAC aims to influence district attorney elections across the country, with a focus on prosecuting repeat violent offenders. Musk’s political involvement appears to be a long-term strategy, and with Trump in office, Musk’s influence in the U.S. political landscape could continue to grow.

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In summary, Elon Musk’s significant investment in Trump’s campaign and his close alliance with the new administration have positioned him for substantial gains. From regulatory relief to potential government contracts, Musk’s businesses could see substantial benefits under Trump’s presidency. However, Musk’s support for controversial foreign figures and potential legal challenges remain points of contention.