In the wake of Donald Trump’s 2024 presidential win, Elon Musk’s backing of the former president seems to have paid off in a big way.
As soon as the election results were in, Tesla shares jumped as much as 15%, signaling that investors see Trump’s return to the White House as a major win for Elon Musk and his companies. Tesla shares reached an impressive $283.52 by mid-morning on November 6, with analysts noting the positive impact a Trump administration could have on Musk’s business ventures.
Elon Musk and Donald Trump’s Unexpected Alliance
Musk emerged as one of Donald Trump’s most prominent supporters this election cycle, even using X, his social media platform, to amplify Trump’s message.
Aditionaly, Elon Musk contributed over $130 million to support Republicans, solidifying his role in helping sway voters. At Trump’s election party in Florida, the former president went so far as to call Musk a “star” and a “supergenius,” praising his achievements with Tesla and SpaceX.
President-Elect Donald Trump on Elon Musk in his 2024 Victory Speech: “We have a new star… A star is born — Elon.” pic.twitter.com/m1i1DS0HAI
— America (@america) November 6, 2024
Although Trump previously criticized electric vehicles (EVs), he softened his stance with Musk’s support, seeing the Tesla CEO as a valuable ally.
Despite Trump’s campaign promises to reduce federal incentives for EVs, Musk has stated he’s unconcerned, viewing subsidies as beneficial mainly to his competitors. He even said on X earlier this year, “Eliminate subsidies. That will only benefit Tesla.”
A Win-Win Situation?
Many analysts see Musk as a significant winner in this election, not just due to Tesla’s stock surge but also because a Trump administration may roll back emissions requirements.
Under Biden, Tesla benefited from stringent emissions rules, earning revenue by selling credits to other automakers. With Trump back in office, Tesla may face fewer regulatory restrictions, allowing Musk to pivot his business priorities.
Elon Musk’s wealth has increased by $13 billion after Donald Trump’s win pic.twitter.com/W1pOqXrS76
— Naija (@Naija_PR) November 6, 2024
Musk’s companies could benefit further if Trump follows through on promises to reduce what he calls “Biden’s electric vehicle mandate.”
And with Musk rumored to be in consideration for a possible government role focused on “cost reduction,” his influence over federal policy could increase dramatically, allowing him to streamline government spending in ways that may benefit his businesses.
However, some challenges lie ahead for Musk. Trump’s tougher trade policies with China could affect Tesla’s Shanghai-based operations. China represents a massive market for Tesla, and any potential trade restrictions could impact its profitability.
But Musk is no stranger to navigating difficult markets, and he could use his influence to help guide trade policies in a way that supports his international business interests.
Should Musk join the Trump administration, he could also benefit from tax exemptions granted to government employees forced to divest certain assets due to conflicts of interest.
Read also: So… You’re Not That Creative, Right? Elon Musk Could be Plagiarizing ‘I, Robot’ Director’s Designs
A clause in the tax code allows officials to indefinitely defer paying capital gains taxes on profits from divestment, potentially saving Musk billions. The Trump-Musk alliance has cemented Musk’s position as a key player in shaping U.S. business policies over the next four years.
Tesla’s stock is already reflecting investor confidence in this partnership, and Musk’s newfound political influence could open up even more doors for his ventures. While there are risks involved, particularly around trade and China relations, the benefits for Musk in a Trump administration could be substantial.
Donald Trump Taps Elon Musk and Vivek Ramaswamy for Government Cost-Cutting Initiative
Now, Trump has chosen tech billionaire Elon Musk and biotech investor Vivek Ramaswamy to lead a new advisory initiative called the “Department of Government Efficiency” (Doge). The goal: to slash bureaucracy and cut waste in federal spending, echoing Trump’s campaign promise to “dismantle” government excess.
While the Doge is not an official government department, Musk and Ramaswamy will work with the White House and the Office of Management & Budget to address inefficiencies in the $6.5 trillion federal budget. Trump likened their mission to the historic Manhattan Project, setting a completion deadline of July 4, 2026.
Musk, known for his cost-cutting measures at Tesla, SpaceX, and Twitter (now X), has proposed sweeping federal spending cuts and eliminating overlapping agencies. Ramaswamy, a former Republican presidential candidate, has advocated for drastic government downsizing, including closing agencies like the FBI and Department of Education.
The Doge’s name is a nod to Musk’s favorite cryptocurrency, Dogecoin, which has seen a value surge since the announcement.
Trump also revealed several other high-profile picks, including Fox News host Pete Hegseth as defense secretary and Senator Marco Rubio as a contender for secretary of state
