Nandini Roy Choudhury, writer
Brief news
- Elon Musk has significantly supported Donald Trump’s presidential campaign, contributing over $130 million and actively promoting Trump on social media, which has positively impacted Tesla’s stock value.
- Musk anticipates regulatory benefits for his companies, including potential reductions in investigations and lawsuits, as well as a streamlined federal approval process for autonomous vehicles under a Trump administration.
- Musk’s political involvement extends beyond Trump, as he plans to influence future elections and support candidates focused on public safety, while facing scrutiny over his ties to Russia and regulatory challenges.
Detailed news
In the early hours of Wednesday morning, whenever Donald Trump was celebrating his victory for the presidency, Elon Musk was right there with him.
“When a star is born. During his speech onstage at his Mar-a-Lago club, President Trump expressed his gratitude to Elon Musk, the richest person in the world, for spending two weeks campaigning in Pennsylvania.
Musk, who contributed at least $130 million to a campaign effort that supported Trump, has turned his support for Trump into yet another full-time job in recent months. He has funded an operation to register voters in swing states and has used his social media platform X to constantly promote his preferred candidate, frequently with misinformation.
Despite the fact that Trump will not take office until January 20th, Musk’s investment in Trump is already beginning to yield positive results.
On Wednesday, Tesla shares increased by fifteen percent, adding almost fifteen billion dollars in paper value to Musk’s net wealth. In the worldwide market, the electric car manufacturer is facing headwinds from competitors based in China, dwindling sales in Europe, and a rising antipathy among consumers for his political beliefs.
Wall Street is wagering that Tesla will be a benefactor, on the whole, as a result of Musk’s tight relationship with Trump and the fact that the president-elect has promised to reduce the kinds of restrictions that Musk considers to be unacceptable.
When it comes to Musk, the potential benefits extend far beyond Tesla.
While delivering his victory address, President Trump also lauded Musk’s SpaceX and expressed gratitude to Musk for delivering Starlink Wi-Fi terminals to areas of the United States that were impacted by hurricanes. After taking all of this into consideration, Musk is left with a multitude of reasons to be positive about the prospect of a second Trump administration in which he and his firms will reap several benefits.
Companies owned by Musk are currently facing a variety of investigations and lawsuits brought by federal agencies. These investigations and lawsuits pertain to a variety of issues, including alleged violations of securities law, violations of workplace safety, labor and civil rights, violations of federal environmental laws, consumer fraud, and vehicle safety defects.
Given the executive branch’s disproportionate authority over federal regulatory organizations, Musk may anticipate that regulators and intelligence agencies will wind down some or all of the 19 known active government investigations and lawsuits against Tesla, SpaceX, and X, which was once known as Twitter. This is something that Musk can look forward to seeing happen.
An all-day rally was held at Madison Square Garden in New York City on October 27, and Musk was one of the numerous supporters and surrogates of Donald Trump who spoke throughout the event. The prejudiced remarks made by comedian Tony Hinchcliffe, especially his depiction of Puerto Rico as a “floating island of garbage,” were subjected to a significant amount of attention during the coverage of the event.
Howard Lutnick, the CEO of Cantor Fitzgerald, was the one who presented Musk to the world. Lutnick referred to Musk as the “greatest capitalist” in the history of the United States. It was said by Lutnick that he and Musk were co-founders of the proposed “Department of Government Efficiency.” Lutnick then inquired about Musk’s opinion of the amount of money that could be reduced from the federal budget.
The response that Musk provided was “at least $2 trillion,” which is greater than the discretionary budget of the federal government, which is $1.7 trillion. In response to the comment, Lutnick let out a scream, and the audience applauded enthusiastically.
Musk has in the past criticized many agencies, such as the Securities and Exchange Commission, the Environmental Protection Agency, and the Federal Aviation Administration, of engaging in regulatory overreach or infringing on his rights to free expression. However, he did not identify what it was that he wanted to cut.
In addition to this, he has voiced his opposition to a tax on billionaires and criticized the administration of Vice President Joe Biden of employing an excessive number of government employees.
Having a position in a tailored commission might provide Musk with the capacity to exert influence on the funding and staffing of government agencies, as well as the potential to advocate for the removal of rules that are inconvenient.
Another thing that Musk mentioned was that he planned to utilize his influence with Trump to build a “federal approval process for autonomous vehicles.” This was expressed on a call for Tesla’s results on October 23. The approval process is now carried out at the state level.
More than a decade has passed since Tesla began working on driverless technology; yet, the company has not yet developed a robotaxi or car that is safe to operate without the presence of a human being who is ready to steer or brake at any time.
It is also possible that a Trump administration may consent to increasing the amount of work that the government does with his businesses.
Musk’s most recent venture, xAI, is committed to the creation of massive language models and generative artificial intelligence software. The company’s objective is to compete with comparable products offered by OpenAI, Meta, and other companies that are supported by Microsoft.
A recent announcement made by Meta said that its open-source Llama models are now accessible to federal entities in the United States that are responsible for military and national security. In addition, OpenAI is already collaborating with the United States military, since the company hired a retired general from the United States Army who had previously served as the head of the National Security Agency in June.
A request for comment was made to Musk, but he did not answer.
Federal contracts worth billions of dollars for SpaceX
The analysis conducted by FedScout on federal expenditures and prime contracts indicates that SpaceX has been awarded more than $19 billion in contracts with the federal government since the year 2008. These contracts include those with NASA, the United States Air Force, and the Space Force for example.
According to Geoff Orazem, the Chief Executive Officer of FedScout, the firm is well positioned to generate several billions of dollars yearly from prime contracts with the federal government for many years to come.
This amount does not take into account expenditure that is classified, spending on smaller things such as Starlink terminals, or spending that is done at the state level through block grants from the federal government. For example, the Federal Emergency Management Agency provides aid to states in order to assist them in recovering from natural disasters during this time.
Orazem discovered, through an analysis of the company’s financial records, that Tesla had claimed sales of around ten billion dollars worth of “automotive regulatory credits,” also known as environmental credits, each year since the year 2015.
The majority of these incentives are generated from federal and state rules in the United States. These requirements oblige automobile manufacturers to sell a certain quantity of low-emission vehicles or to purchase credits from businesses such as Tesla, who frequently have an excess of these vehicles.
In the second quarter of 2024, regulatory credits accounted for around sixty percent of Tesla’s net profits, whereas in the third quarter, they accounted for thirty-nine percent. Approximately fifty percent of Tesla’s earnings for the third quarter came from other government discounts on electric vehicle sales.
Trump has not made it clear if he intends to continue the regulatory credit schemes and rebates that are already in place. In the past, he has indicated that he would reduce the federal electric vehicle tax credit of $7,500.
In addition, Trump has pledged to reduce taxes on income and to impose tariffs that are quite high. A move that would entail tariffs may be beneficial for Tesla in terms of protecting itself from Chinese competitors; but, it could also cause major disruption to Tesla’s automotive supply chain, which is dependent on certain components and parts originating from China.
With regard to the safeguards afforded to workers, Musk has been pursuing legal action in an effort to undermine the constitutional authority of the National Labor Relations Board. If Trump is ready to dismantle or weaken the power of the agency, which is designed to guarantee that firms respect federal rules that enable workers to organize unions and engage in collective bargaining with their bosses, he may come to the conclusion that such lawsuits are no longer necessary.
Additionally, there is Musk’s engagement with nations that have been sanctioned.
Musk, the CEO of SpaceX, has decided to prevent the usage of Starlink, the company’s satellite internet service, above Taiwan, even for the United States military personnel stationed there. According to the Wall Street Journal, Musk turned off access as a favor asked by Russian President Vladimir Putin, purportedly on behalf of Chinese President Xi Jinping, during a series of continuous and regular discussions between the two men. The exchange of information between the two men took place over the course of the conversation.
Acting in reaction to the accusations, NASA Administrator Bill Nelson stated that if the reports were accurate, then the discussions that Musk had with Putin ought to be probed by the federal government.
According to an analysis conducted by NBC News, Musk has on many occasions shared information that is favorable to the Kremlin with his hundreds of millions of followers on X. There were at least sixty instances on the social network in which he interacted with content that was produced by Tenet Media and its producers. According to the Department of Justice, Tenet was at the core of a clandestine operation that was accused of being carried out by Russia in order to alter public opinion in the United States prior to the election in 2024.
Trump has regularly expressed his fondness for the Russian president, even after Russia’s destructive invasion of Ukraine in 2022. This is in contrast to the recent statement made by Vice President-elect JD Vance, who referred to Putin as an opponent of the United States. The win of Donald Trump in this week’s election has been praised by authorities from the Kremlin.
Musk, who openly embraced Trump shortly after the initial attempt to kill the former president in July, has stated that he plans to continue to be active in the political process in the United States for the foreseeable future.
During a conversation that took place on Tuesday on X, he stated that his super PAC will continue its operations beyond the presidential election and would attempt to exert influence over the results of elections for midterms, intermediate elections, and elections for local prosecutors and other positions across the United States.
Musk stated that one of his top priorities would be to assist in the election of district attorneys who focus on prosecuting repeat violent felons who pose a clear threat to the general public.
Source: CNBC news
