How Donald Trump's US Election Win Could Benefit Elon Musk's Companies

Photo : Reuters

Billionaire entrepreneur Elon Musk's support for Donald Trump's re-election bid has positioned him to leverage significant political influence to benefit his vast business empire. Musk contributed at least $119 million to a pro-Trump spending group and was a prominent backer of Trump's campaign in the crucial late stages, notably during Trump's challenge against Kamala Harris. With Trump's victory, Musk's businesses, including Tesla, SpaceX, Neuralink, and others, could now receive more favorable treatment from the U.S. government.

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Musk’s political strategy is rooted in a desire to reduce regulatory obstacles that he views as hindrances to innovation and growth. Sources familiar with Musk’s dealings reveal that he sees Trump's administration as a pathway to reduce the regulatory burden on his companies, which heavily rely on government subsidies, policies, and regulations. Musk’s support for Trump comes amid growing frustration with the Biden administration's policies, especially regarding Tesla's exclusion from key events, like the White House's 2021 EV summit, where Tesla’s non-union status was highlighted.

Musk’s primary business ventures depend significantly on U.S. government support. Tesla benefits from electric vehicle incentives and government programs, while SpaceX has secured numerous government contracts for space missions. Musk’s political endorsement of Trump isn’t just about personal belief; it’s a calculated move to align his business interests with Trump’s deregulatory stance. Tesla, for example, faces scrutiny from the National Highway Traffic Safety Administration (NHTSA) over its Autopilot system, and Musk’s goal over the next four years is to push for "de-enforcement" or a halt in these regulatory actions.

Additionally, Musk is hoping for streamlined, uniform regulations for autonomous vehicles at the federal level, which would ease the regulatory landscape for Tesla’s future driverless vehicles. Musk has also signaled that his artificial intelligence startup, xAI, could benefit from more favorable regulations under a Trump administration, potentially shaping future AI-related policies or even a new regulatory body.

Musk’s growing political power aligns with a broader shift among Silicon Valley’s top billionaires, who are increasingly backing right-wing populism as a counter to the liberal ideologies that have historically dominated the region. Musk’s influence could usher in a new era of business-government relations, potentially shifting policies in favor of high-tech companies and deregulation. His rising prominence has even led to comparisons with industrial barons of the Gilded Age, like J.P. Morgan, who wielded vast influence over U.S. policy to benefit their enterprises.

Musk’s companies are already seen as critical players in their respective industries, and his influence with Trump could only strengthen their position. SpaceX, for example, is the dominant player in commercial space travel, receiving government support while facing minimal regulatory oversight. Tesla is also the leader in the electric vehicle market, with government backing through incentives and tax credits. Despite his vocal criticism of government bureaucracy, Musk’s companies benefit from a unique position of power where they are often treated more favorably than competitors.

Despite the challenges that could come with Musk's growing influence, including concerns about the lack of oversight in industries like space exploration and autonomous driving, his strategy could fundamentally change the regulatory landscape for innovation. Musk’s relationship with Trump seems poised to accelerate his ambitions for deregulation and reshape the business environment in favor of his companies, marking a pivotal moment in the intersection of business and politics.

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