Donald Trump swept to power at the White House after facing an "incredibly" close contest with Democrat Kamala Harris. He defied opinion polls that gave Harris a narrow lead and defied legal challenges to become the first felon to win the US Presidential Elections. He is all set to become the 47th US president if all goes well at the Electoral College vote. His rise to power comes as a big victory for the world's richest man – Elon Musk.
"The future is gonna be fantastic," Musk posted on X, alongside a picture of a rocket, as Trump closed in on victory on Wednesday. "America is a nation of builders. Soon, you will be free to build," he said in another post.
Elon Musk, a billionaire who owns SpaceX, Tesla and also X social media platform, extensively campaigned for Donald Trump online and offline. According to reports, shares of Tesla soared on Wednesday after mega elections that sent Donald Trump back to the White House. At the same time, shares of rival EV maker Rivian plunged 8% and Lucid Group fell 4%. China-based NIO slid 5.3%.
This mirrored speculations that Musk's Tesla, SpaceX and other entities are likely to make significant gains under the Trump administration due to their size.
1. Role in US government: First up is Donald Trump's promise to Musk that if re-elected, he would appoint the billionaire to head a “government efficiency commission task" that would conduct a complete financial and performance audit of the entire federal government and make recommendations for drastic reforms. He is expected to lead the new Department of Government Efficiency, targeting $2 trillion in cuts from the federal government's $7 trillion budget.
As the head of the department, Musk would ultimately be the decision-maker in the federal government. David Fahrenthold, a New York Times investigative reporter, earlier explained this commission matters a lot to Elon Musk "as the people who oversee him, the agencies that oversee him" will now be overseen by Musk himself. "Elon is going to flip that relation...He's going to have a position of power over them," he said.
This is fundamentally important as the CEOs of Tesla and SpaceX already have millions of dollars in government contracts, including with US space agency NASA, national defense department and intelligence units.
For example, SpaceX has $3.6 billion in contracts with federal agencies this year, according to government data, and that number has risen every year of the Biden administration, despite their rocky relationship, NBC news reported. So, how Musk would address "conflicts of interest" between his interests in autos, space, health, construction and artificial intelligence is not clear.
2. Ease regulatory pressure: At present, Musk's companies face significant and, at times, costly government regulations related to consumer and environmental protections, Reuters reported. The billionaire has been a vocal critic, for instance, of federal review of his SpaceX rocket business.
In October, SpaceX's iconic Falcon 9 rocket was grounded for the third time (in three months) after part of the rocket uncontrollably crash-landed in the ocean. Federal safety regulators are currently investigating Tesla's driver assistance features following several accidents, despite Musk's assurances about the technology's readiness.
NBC News reported that Musk has engaged in at least 19 regulatory and legal disputes with the Joe Biden administration and federal agencies over recent years. Beyond his business empire, Musk’s America PAC is also facing legal challenges.
3. Tax and tariff favours: Trump is vowing to reduce the corporate tax rate to 15% — potentially benefiting Musk's business empire. Trump has also proposed tariffs of 10% to 20% on foreign goods that would also impact electric vehicle maker's outside the US, especially in China.
“Tesla has the scale and scope that is unmatched," said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players," Ives was quoted by the Associated Press as saying.
4. Cryptocurrency: Trump has pledged to be a "crypto president", a plan that may start with replacing industry opponent Gary Gensler, the Securities and Exchange Commission chair who has sued most of the industry – including Coinbase, Binance and Kraken. Musk, too, is a crypto supporter.
5. Musk wants to reach Mars: “We will never reach Mars if Kamala wins,” Musk had posted on X in September. Trump told Fox News in October that he’s committed to the Mars idea: “I want him to send a rocket up to Mars. He made a promise he’ll get to Mars before the end of my administration.”
(With inputs from agencies)
