How Elon Musk plans to profit from President Trump’s victory

Elon Musk was right there early Wednesday morning as Donald Trump celebrated his presidential victory.

“A star is born, Elon,” President Trump said on stage at the Mar-a-Lago resort, thanking the world’s richest man for spending two weeks campaigning in Pennsylvania.

Musk, who has poured at least $130 million into pro-Trump campaign efforts, has in recent months turned his support for Trump into yet another full-time job, funding voter registration efforts in battleground states and promoting his own He uses social media platform X to constantly promote his Trump advocacy. Preferred candidate, but often misinformation is spread.

Trump is only in office until January 20, but Musk’s investment in Trump is already paying off.

tesla The stock soared 15% on Wednesday, adding about $15 billion in paper money to Musk’s net worth. The company faces headwinds from China-based competitors in global markets, declining sales in Europe and growing consumer distaste for his political views.

But with Mr. Musk aligning himself with Mr. Trump and the president-elect promising to cut the kinds of regulations that Mr. Musk dislikes, Wall Street is betting that Tesla will ultimately benefit.

For Musk, the potential profits go far beyond Tesla.

In his victory speech, Trump also praised Musk’s SpaceX and thanked Musk for delivering Starlink Wi-Fi devices to hurricane-hit areas in the United States. There remains plenty of reason to be optimistic that a second Trump administration will pay healthy dividends for his business.

Musk’s companies are currently embroiled in a variety of federal investigations and lawsuits related to alleged securities law violations, workplace safety, labor and civil rights violations, violations of federal environmental laws, consumer fraud, and vehicle safety defects. It is.

Given the executive branch’s extraordinary control over federal regulatory agencies, Mr. Musk said regulators and intelligence agencies have no control over the 19 known ongoing federal investigations into Tesla, SpaceX, and X, formerly known as Twitter. One could hope for some or all of the litigation to be scaled back.

Musk was among the many Trump fans and surrogates who spoke at the daylong rally at New York’s Madison Square Garden on October 27th. Much of the coverage of the event focused on comedian Tony Hinchcliffe’s bigoted quips, including describing Puerto Rico as a “floating island of trash.”

Mr. Musk was introduced by Cantor Fitzgerald CEO Howard Lutnick, who called the Tesla CEO “the greatest capitalist” in American history. Lutnick said he and Musk co-founded the envisioned Department of Government Efficiency and asked Musk how much he thought could be cut from the federal budget.

Musk responded, “At least $2 trillion,” which is more than the federal government’s discretionary budget of $1.7 trillion. The remark prompted a scream from Lutnick and applause from the audience.

Musk did not say what he was trying to cut, but he has previously accused agencies such as the SEC, Environmental Protection Agency and Federal Aviation Administration of overregulation and violating free speech rights. was.

He also accuses the Biden administration of hiring too many Internal Revenue Service employees and is a vocal opponent of the so-called billionaire tax.

A role on a custom-built committee could give Musk greater authority over federal agency budgets and staffing, and the ability to push for the removal of inconvenient regulations.

Musk also said during Tesla’s earnings call on Oct. 23 that he intends to use his influence with President Trump to establish a “federal approval process for self-driving cars.” Approval currently occurs at the state level.

Tesla has been working on driverless technology for more than a decade, but it has yet to develop a robotaxi or vehicle that can be used safely without a human being at the wheel or brakes at all times.

Additionally, the Trump administration may agree to step up efforts between government and business.

Musk’s latest startup, xAI, develops large-scale language models and generative artificial intelligence software aimed at competing with similar products such as Microsoft-backed OpenAI and Meta.

Meta recently announced that its open source Llama model is available to U.S. government agencies in the defense and national security space. And OpenAI is already working with the U.S. military, adding a retired U.S. Army general and former head of the National Security Agency to its board of directors in June.

Musk did not respond to requests for comment.

SpaceX has received more than $19 billion in federal contracts since 2008, including from NASA, the U.S. Air Force and the Space Force, according to a study of federal spending and prime contracts by FedScout.

FedScout CEO Jeff Orazem said the company expects to earn billions of dollars a year from prime federal contracts for years to come.

This figure includes classified spending, smaller spending such as Starlink terminals, or large sums from the federal government, such as when the Federal Emergency Management Agency gives aid to states to help recover from natural disasters. Expenditures made at the state level through grants are not included.

Meanwhile, Tesla has reported sales of about $10 billion in “auto regulatory credits” (environmental credits) since 2015, Orazem found after evaluating the company’s financial reports.

These incentives primarily stem from U.S. federal and state regulations that require automakers to sell a certain number of low-emission vehicles or buy credits from companies like Tesla. , companies like Tesla are often overextended.

Regulatory credits accounted for approximately 60% of Tesla’s net income in the second quarter of 2024 and 39% in the third quarter. Other government rebates on EV sales accounted for about 50% of Tesla’s third-quarter profit.

President Trump has not said whether he will maintain these rebates or regulatory credit programs. He previously said the federal government’s $7,500 EV tax credit could be cut.

Additionally, President Trump promised to lower income taxes and introduce high tariffs. While tariffs may help protect Tesla from Chinese competitors, such measures could cause significant disruption to Tesla’s auto supply chain, which relies on some materials and parts from China. be.

When it comes to worker protections, Musk is seeking to overturn the National Labor Relations Board’s constitutional authority through litigation. If President Trump intends to eliminate or reduce the agency’s powers, he may decide such lawsuits are no longer necessary. The agency is supposed to ensure that companies comply with federal laws that allow workers to form unions and bargain collectively with employers.

Then there’s Musk’s involvement with sanctioned governments.

At SpaceX, Musk has refrained from using the company’s Starlink satellite internet service over Taiwan, even for U.S. troops stationed there. The Wall Street Journal reported that Musk received access as a favor requested from Russian President Vladimir Putin on behalf of Chinese President Xi Jinping during an ongoing series of frequent meetings between the two men. It was reported that it was cut off.

In response to the report, NASA Administrator Bill Nelson said that if the report is true, Musk’s conversations with President Putin should be investigated by the federal government.

Mr. Musk has repeatedly posted pro-Kremlin content to X’s hundreds of millions of followers, and has engaged with content from Tenet Media and its creators at least 60 times on the social network, according to an NBC News analysis. It is said that he was Tenet was at the center of an alleged covert Russian operation to manipulate public opinion in the United States ahead of the 2024 election, according to the Justice Department.

Vice President-elect J.D. Vance recently called Putin an enemy of the United States, but since Russia’s devastating invasion of Ukraine in 2022, Trump has frequently spoken of his love for the Russian president. There is. Kremlin officials are celebrating Trump’s victory in this week’s election.

Musk, who publicly supported President Trump shortly after the first assassination attempt on the former president in July, said he plans to remain involved in U.S. politics for a long time.

He said during Tuesday’s debate on X that his super PAC will continue to operate after the presidential election, aiming to influence the outcome of midterm elections, midterm elections and local attorney elections across the country.

Musk said his priority is to help elect a district attorney who will “prosecute repeat violent criminals who clearly pose a danger to the public.”