Elon Musk wins big by betting on Trump

Elon Musk invested over $130 million in pro-Trump efforts this year.

Elon Musk’s campaign supporting Donald Trump has paid off — and the billionaire has a lot to gain over the next four years.

Having said he became more politically active to combat “the woke mind virus,” Musk has spent months strengthening his ties to Trump, using his platform on X to advocate for him. He invested over $130 million in pro-Trump efforts. He said that the 2024 election would decide “the fate of America, the fate of Western civilization.”

In October, he told Tucker Carlson he might face “vengeance” if Kamala Harris won. That month, he even pledged a daily $1 million giveaway to swing-state voters who sign his petition supporting free speech and gun rights.

B-17 spoke with experts ahead of the election about Musk’s involvement in the campaign. Some suggested Musk’s actions might be a risk-hedging strategy to secure Trump’s backing if he wins. Cary Coglianese, a law professor and the director of the Penn Program on Regulation at the University of Pennsylvania, said Musk might merely view himself as capable of “turning around the federal government.”

Regardless of his underlying motivations, the billionaire will likely benefit from Trump’s second tenure in the White House. Erik Gordon, the area chair of entrepreneurial studies at the University of Michigan’s Ross School of Business, put it simply: “Friends of the winner share in the winnings.”

What a Trump win means for Musk’s business empire

Aside from direct influence within the government, a Trump presidency could lead to a lot of wins for Musk’s business empire, which includes Tesla, SpaceX, The Boring Company, Neuralink, and X.

In a note issued early Wednesday, Wedbush analyst Dan Ives said Trump’s election was “a home run” for Tesla. “Elon Musk’s status as Trump’s ally from the business community hasn’t gone unnoticed by investors,” he added, as the company’s stock surged premarket.

Ives added that, though the prospect of Trump pulling rebates and tax incentives could harm the EV industry, this could be a “huge positive” to Tesla thanks to its “scale and scope” which is “unmatched in the EV industry.”

“This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment,” Ives added.

Many of Musk’s companies heavily rely on federal approvals, regulations, subsidies, or contracts — and Trump has pledged a lighter regulatory landscape with reduced corporate and personal taxes.

Gordon said that, under Trump, regulators would allow Musk “more freedom to develop advanced technologies.”

Regulatory leniency could be crucial for Tesla, especially as investors closely watch Musk’s commitment to secure approval for fully autonomous vehicles in Texas and California.

Francesco Trebbi, a professor of business and public policy at the University of California Berkeley, told B-17 a Trump presidency may help SpaceX procure large contracts with the Department of Defense. The company has recently made major strides in space travel, and that kind of support could help it maintain a competitive edge over rivals like Blue Origin.

Trump has supported Musk’s idea for a ‘Department of Government Efficiency’

Trump has agreed to incorporate Musk’s proposal to establish a “Department of Government Efficiency” led by Musk. The president-elect has said this would conduct a “complete financial and performance audit of the entire federal government.”

The role could give Musk influence over agencies he has long lamented, such as the Securities and Exchange Commission, which is investigating his 2022 acquisition of Twitter, now called X, and sued him in 2018 over a tweet in which he claimed he had the funding to take Tesla private.

At a recent rally in Pittsburgh, Musk said he had discovered there were 428 federal government agencies. “What the hell do you need 428 agencies for? Why do you even need 100? This is crazy,” he said. During a town hall in Pennsylvania on October 18, he suggested laying off federal employees.

Musk has already suggested using the role to his advantage. During Tesla’s most recent earnings call, Musk suggested that if there were a government efficiency commission, he would help push the state-by-state approval process forward with a “federal approval process for autonomous vehicles.”

There are risks ahead

While Musk has a lot to gain over the next four years, his alignment with Trump doesn’t come without risk — and there’s no guarantee everything will go as planned.

Trump intends to retract unspent funds from the Inflation Reduction Act, or IRA, to “rapidly defeat inflation and lower prices,” according to Karoline Leavitt, the campaign’s national press secretary. The IRA provides advantages to Tesla, such as a $7,500 tax credit for new electric vehicles and tax credits for solar installations.

Coglianese said Musk was also “banking on a president who will want to or be willing to repay Musk for his loyalty.” He said it’s not always clear, though, that Trump’s strongest supporters get everything they want.

He cited the example of billionaire investor Carl Icahn, who acted for Trump as an unpaid advisor in his first term. Icahn reportedly secured some relief from the Environmental Protection Agency for an oil refinery he owned but ended up resigning amid criticism over potential conflicts of interest.

Joan MacLeod Heminway, a law professor at the University of Tennessee, told B-17 that there are “ethical rules mandating compliance” with a number of obligations, like conflict-of-interest reporting.

“Elon Musk may not want to take on these obligations,” Heminway said.