- Elon Musk has done everything he can to support former President Donald Trump for re-election.
- Musk could gain influence at the federal level if Trump is elected president.
- It’s unclear what a Harris administration will mean for Musk and his business empire.
The stakes are high for Elon Musk and his business empire this election season.
Since the announcement His endorsement of former President Donald Trump in Julythe billionaire has consistently used X to voice his support for the Republican Party and has taken the stage with Trump during at least two rallies.
He hosted his own political series.”talks“And It invested more than $130 million in pro-Trump efforts this year. He also committed to making a daily donation of $1 million to registered voters in swing states who sign his petition in support of free speech and the right to bear arms.
Musk’s actions raise the question: What will the billionaire gain from a Trump presidency?
Probably a lot.
Musk in the era of Trump
Many of Musk’s companies depend largely on it on federal approvals, regulations, subsidies, or contracts — and Trump has promised a lighter regulatory environment Plans to reduce taxes on corporations and individuals.
If Trump gets the presidency, Musk could benefit from “key appointments within the public administration,” Francesco Trippi, a professor of business and public policy at the University of California, Berkeley, told Business Insider. He added that this could secure valuable relationships that extend beyond the next four years.
Trump has already incorporated some of Musk’s policy proposals into his campaign, with plans to create a government efficiency commission led by Musk. Trump said the committee would conduct a “complete financial and performance review of the entire federal government” and make suggestions for “radical reforms.”
Musk proposed firing a number of federal employees at the Pennsylvania City Council on October 18.
“Why the hell do you need 428 agencies,” Musk said recently He said At a rally in Pittsburgh. “Like why do you even need 100?”
A Trump presidency may also lead to reduced regulatory scrutiny, said Eric Gordon, area chair of entrepreneurship studies at the University of Michigan’s Ross School of Business. That could give Musk “more freedom to develop advanced technologies, which is one of his favorite things to do,” Gordon said.
Tesla is at a pivotal moment, with investors eyeing Musk’s pledge to gain approval for fully self-driving vehicles in Texas and California. However, ongoing investigations into Tesla’s self-driving technology by government agencies, including the National Highway Traffic Safety Administration, could derail the company’s self-driving plans.
During a recent earnings call, Musk suggested that if there was a government competency commission, it would help move the approval process forward at the state-by-state level through the “federal approval process for autonomous vehicles.”
As for SpaceX, Trippi said a Trump presidency could help the company land major contracts with the Department of Defense. This could help it maintain its edge against competitors like Blue Origin.
Musk under Harris
While Musk could gain power, government contracts, and looser regulations under Trump, it is unclear how he might be affected under a Harris administration.
One major policy on the minds of many business leaders is Harris’ proposed tax plan. It aims to raise the corporate tax rate from 21% to 28% – a move that Bank of America estimates could result in a 5% drop in profits. This, along with the possibility of stricter regulations, could affect a number of companies, including those owned by Musk.
Harris could introduce new safety regulations or enact tax breaks for electric or self-driving vehicles that favor competitors, Gordon said.
As for X, which Musk has described as a platform for free speech, Gordon said the Harris administration could pressure it to ban material it characterizes as “misinformation.” However, Gordon said X would likely win in First Amendment courts.
Tevye TroyA senior fellow at the Center for Bipartisan Policy said it was unlikely — and likely illegal — that Harris would send orders to target Musk. However, Troye, also a former senior White House aide, said Musk would likely face “selective enforcement.”
“We hope that government units will be immune to political pressure,” Joan McLeod Hemenway, a law professor at the University of Tennessee, told BI. “But the people in those units are human beings and may inadvertently vet proposals from entities owned or controlled by Elon Musk.”
It’s also possible that nothing will meaningfully change for Musk under a Harris administration.
“We don’t have any strong indication that Harris wants to significantly expand regulatory burdens,” Cary Coglianese, a law professor at the University of Pennsylvania and director of the Penn Program on Regulation, told Business Insider.
Tom Narayan, an analyst at RBC Capital Markets, said a Democratic administration could be better for Musk because Harris supports Mexico’s inflation and production reduction law, which Trump has spoken out against.
The IRA provides significant benefits to Musk, including a $7,500 tax credit for new electric vehicles, which helps Tesla. It also offers tax breaks for solar installations.
Carolyn Leavitt, national press secretary for the Trump campaign, told BI that if President Trump is elected, he will support the auto industry, “allowing room for both gas-powered vehicles and electric vehicles.” However, he plans to end the Green New Deal and eliminate unspent funds from the Inflation Control Act in an effort to “quickly defeat inflation and lower all prices.” Levitt said.
Musk is playing a risky game
Since Musk has said he has supported Democrats in the past, Al-Tarbi said he might side with Trump to secure government support.
“I see Musk’s realignment with the GOP as a risk hedging strategy, designed to preempt government regulation/preserve government support regardless of who wins in November,” Trippi said.
Coglianese also said that a potential Musk sees himself as someone who can “turn around the federal government,” much like his approach to the Twitter takeover.
“It is also plausible that he sees himself as someone who could be a savior,” Coglianese said.
Coglianese said that the alliance strategy with Trump is fraught with risks, however.
“It depends on a president who wants or is willing to repay Musk for his loyalty,” Coglianese said, adding that it’s not always clear that even his strongest supporters get everything they want.
Carl Icahn got some help from the EPA while advising Trump during his first term, but his term ended in controversy, Coglianese said. The billionaire investor has resigned from his unpaid role amid criticism over a potential conflict of interest.
Other cases ended better. Trump previously said that Tim Cook was the only CEO who called him directly when he had a problem. Apple CEO got tariff relief on iPhone with former president.
“There are ethical codes that mandate compliance with different types of obligations, including reporting conflicts of interest, for certain types of government positions,” Hemenway said. “Elon Musk may not want to take on these obligations.”