On October 5, 2024, Tesla CEO Musk (right) and former US President and Republican presidential candidate Donald Trump participated in a campaign rally held at the site of the first assassination attempt in Butler, Pennsylvania.
Jim Watson | AFP | Getty Images
as Donald Trump celebrate his presidential victory Wednesday morning, Musk Right next to him.
“A star is born. Elon,” Trump said on stage at Mar-a-Lago, thanking the world’s richest man for spending two weeks on the campaign trail in Pennsylvania.
Musk has poured at least $130 million into pro-Trump campaigns and in recent months has turned his support into another full-time job, funding a swing state operation Registers voters and uses his social media platform X to continually promote his preferred candidates, often containing misinformation.
Although Trump won’t take office until January 20, Musk’s investment in Trump has already paid off.
Tesla The company’s shares soared 15% on Wednesday, adding about $15 billion to the book value of Musk’s net worth. The electric car maker faces headwinds in global markets from Chinese rivals, falling sales in Europe and growing consumer distaste for its political views.
But with Musk courting Trump and the president-elect promising to slash the type of regulation Musk abhors, Wall Street believes Tesla will be a beneficiary overall.
For Musk, the potential gains extend far beyond Tesla.
In his victory speech, Trump also praised Musk’s SpaceX and thanked Musk for providing Starlink Wi-Fi terminals to hurricane-hit areas of the United States. A second Trump administration will bring handsome dividends to him and his businesses.
Musk’s company is currently involved in a series of investigations and lawsuits by federal agencies involving alleged violations of securities laws, workplace safety, labor and civil rights violations, violations of federal environmental laws, consumer fraud and vehicle safety defects.
Given the executive branch’s vast control over federal regulators, Musk can expect regulators and intelligence agencies to wind down some or all of the 19 known federal investigations and lawsuits against Tesla, SpaceX and X (formerly Twitter) .
Musk was one of many Trump fans and surrogates who spoke at a speech at Madison Square Garden in New York on October 27. All day rally. Much of the coverage of the event focused on comedian Tony Hinchcliffe’s paranoid quips, including his description of Puerto Rico as a “floating island of garbage.”
Musk was introduced by Cantor Fitzgerald CEO Howard Lutnick, who called the Tesla CEO “the greatest capitalist” in American history. Lutnick, who said he and Musk are co-founders of the envisioned “Department of Government Effectiveness,” asked Musk how much he thought could be cut from the federal budget.
Musk replied “at least $2 trillion,” which is more than the federal government’s budget $1.7 trillion discretionary budget. The words elicited screams from Lutnick and applause from the crowd.
Musk has not specified what he is seeking to cut, but he has previously accused agencies such as the Securities and Exchange Commission, Environmental Protection Agency and Federal Aviation Administration of over-regulating or infringing on his free speech rights.
He also accused the Biden administration of hiring too many IRS personnel and spoke out against the so-called billionaire tax.
Serving on a customized committee would give Musk control over federal agency budgets, staffing and the ability to push for the elimination of inconvenient regulations.
Musk also said during Tesla’s earnings call on October 23 that he intended to use his influence over Trump to establish a “federal approval process for self-driving cars.” Currently, approvals occur at the state level.
Tesla has been working on self-driving technology for more than a decade but has yet to produce a robotaxi or vehicle that can be safely used without a human being ready to drive or brake.
In addition, the Trump administration may agree to strengthen government cooperation with its companies.
Musk’s latest startup, xAI, is developing large-scale language models and generative artificial intelligence software, aiming to compete with similar products from Microsoft-backed OpenAI, Meta and others.
Yuan recently announced Its open source Llama model can be used by U.S. government agencies in the defense and national security fields. OpenAI has begun working with the U.S. military after adding a retired U.S. Army general and former National Security Agency director to its board of directors in June.
Musk did not respond to a request for comment.
On October 13, 2024, SpaceX captured the first-stage “Super Heavy” booster of its Starship rocket.
Sergio Flores | AFP | Getty Images
SpaceX’s multibillion-dollar federal contract
SpaceX has received more than $19 billion in contracts with the federal government since 2008, including contracts from NASA, the U.S. Air Force and the Space Force, according to a FedScout study of federal spending and major contracts.
FedScout CEO Geoff Orazem said the company expects to generate billions of dollars in annual revenue over the next few years from major contracts with the federal government.
This number does not include classified spending, smaller projects like Starlink terminals, or spending done at the state level through federal block grants, such as the Federal Emergency Management Agency’s aid to states to help recover from natural disasters .
Meanwhile, Orazem’s review of the company’s financial documents found that Tesla has reported approximately $10 billion in “auto regulatory credit” or environmental credit sales since 2015.
The incentives largely 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, which often have a surplus of credits.
Regulatory credits account for approximately 60% of Tesla’s net profit in the second quarter of 2024, compared with 39% in the second quarter of 2024. Season 3. Other government subsidies for electric vehicle sales accounted for about 50% of Tesla’s third-quarter profit.
Trump has not yet made clear whether he will maintain these rebate and regulatory credit programs. He has previously stated that he may be cut Federal $7,500 electric vehicle tax credit.
In addition, Trump also promised to cut income taxes and implement high tariffs. Although tariffs While the move could help protect Tesla from Chinese rivals, it could seriously disrupt Tesla’s auto supply chain, which relies on some materials and parts from China.
When it comes to worker protections, Musk has sought to undermine the National Labor Relations Board’s constitutional authority through litigation. Trump may find that such lawsuits are no longer needed if he is willing to eliminate or reduce the power of the agency, which is responsible for ensuring companies comply with federal laws that allow workers to form unions and bargain collectively with employers.
Then there’s Musk’s relationship with sanctioned governments.
At SpaceX, Musk Starlink prohibitedThe company’s satellite network services cover Taiwan and even serve U.S. troops stationed there. The Wall Street Journal reports that Musk cut off access at the request of the Russian president Vladimir Putin Said to represent the President of China Xi Jinping The two are engaged in a series of ongoing and frequent talks.
In response to the reports, NASA Administrator Bill Nelson said that if the reports are true, Musk’s conversations with Putin should be investigated by the FBI.
according to NBC News AnalysisMusk has since repeatedly posted pro-Kremlin content on X to his hundreds of millions of followers. Creed is a center Alleged Russian covert operation Manipulating U.S. public opinion ahead of 2024 election, according to the group Ministry of Justice.
Vice President-elect Vance recently called Putin America’s opponentsTrump has often spoken of his love for the Russian president since Russia’s devastating invasion of Ukraine in 2022. Trump’s victory in this week’s election.
Musk, who Publicly support Trump Shortly after the first assassination attempt against the former president in July, he said he intended to stay involved in U.S. politics for the long term.
He said during a discussion on Tuesday’s X show that his super PAC will continue to work after the presidential election and will seek to influence the results of the U.S. midterm elections and district attorney elections.
Musk said the first priority is to help elect district attorneys who “prosecute repeat violent criminals who are clearly a danger to people.”
