Elon Musk's risky game with Trump is paying off

Elon Musk's reputation and wealth rests on his willingness to make risky bets with SpaceX and Tesla decades ago. Nothing seemed riskier than his high-profile, high-dollar bet that Donald Trump would win the presidency. And like those previous gambles, this one is likely to pay off by making him the most influential executive in the new administration – and even richer.

Already the world's richest person, Musk's net worth grew by $21 billion to $285.6 billion on Wednesday as Tesla shares rose 15% following news of Trump's victory. The stock closed at $288.53, its highest level in more than a year. SpaceX, his rocket company that has become essential to NASA and Defense Department launches, is expected to become an even bigger beneficiary of federal contracts from a Trump administration, which would further boost Musk's wealth.

The impact of his support goes beyond the short-term financial gains from his Tesla shares. Trump has said he wants him to serve as an adviser on government efficiency in his new administration, which at least suggests that rules and regulations for large companies, especially those he favors, will be much more relaxed.

“He is a special guy. He’s a super genius,” Trump said of Musk in his victory speech on Wednesday. “We must protect our geniuses. We don't have that many of them. We have to protect our super geniuses.”

While his relations with Biden have been frosty and Musk was snubbed early on for not attending White House events focused on electric vehicle makers, things are expected to change dramatically in the new administration. Musk, who has never been a major campaign donor in the past, donated around $120 million to Trump and Republican candidates through his America PAC, held a controversial cash raffle for voters in swing states to support his preferred candidate, and made numerous appearances public appearances at Trump rallies in the final weeks of the election campaign. He did so despite multiple consumer surveys showing that these measures are unwelcome among Tesla's core buyer base, which largely identifies as climate-conscious consumers.

Tesla faces a number of ongoing reviews from federal regulators, including the National Highway Traffic Safety Administration, over accidents involving its Autopilot and Full Self-Driving features, many of which have resulted in fatalities. Tesla's manufacturing operations have been investigated by the Occupational Health and Safety Administration and the Environmental Protection Agency for workplace hazards and industrial pollution. And the Securities and Exchange Commission, which previously sanctioned Musk for false tweets about Tesla's privatization, is currently seeking new penalties against the billionaire for failing to testify in the investigation into his $44 billion Twitter takeover has submitted. In Texas, SpaceX's massive launch facility was also recently fined $140,000 for violating groundwater regulations.

“America is a nation of builders,” Musk said on X, formerly Twitter, after a Trump victory became apparent. “Soon you’ll be free to build.”

While it's unclear whether a father of 11 who runs several companies in addition to Tesla and SpaceX, including xAI, The Boring Co. and Neuralink, can land a job with the Trump administration, some Tesla investors are excited. Ross Gerber, president of Los Angeles-based investment firm Gerber Kawasaki, expects Musk will push for fewer regulations — and his companies and others should broadly benefit.

“It’s just good,” said Gerber, whose fund holds about $60 million in Tesla shares. “Do you know how much time and money companies spend just dealing with stupid document requests asking for nonsense that the regulators themselves have no idea what they are talking about? It just goes on and on.”

But he is unsure if Musk will work to influence Trump's policies on electric vehicles and trade tariffs, which would lead to significant cost increases for Tesla vehicles, which are made with numerous imported parts and materials.

“It depends on whether Trump wants to listen to anyone,” Gerber said. “Elon has a particularly delicate balance between the nations he must accommodate, including China. It’s a very delicate dance that he may or may not do well.”

Musk's changing priorities, steering Tesla toward robotaxis, robotics and AI and seemingly abandoning his previous climate concerns, are also likely to benefit the next administration.

Trump will likely have an “overall negative impact on the EV industry as the EV rebates/tax incentives are likely to be eliminated. However, we see this as extremely positive for Tesla,” equity analyst Dan Ives, an outspoken Tesla bull, said in a research note. “It has a scale and scope unparalleled in the electric vehicle industry, and this dynamic could give Musk and Tesla a clear competitive advantage in an environment where electric vehicle subsidies do not exist.”

Ives also believes Trump could help advance Musk's robotaxi dreams, especially by limiting any new federal barriers to the technology. “In this scenario, the acceleration of autonomous driving will be the focus for investors, as some of the 2026/2027 targets for Tesla could be accelerated to keep pace with the current autonomous driving schedule in China.”

The unexpectedly close bond between Musk and Trump that has developed over the past year is likely to make the tech billionaire, already a larger-than-life figure in several industries, a uniquely influential figure in the years to come – if the current lovefest continues.

“He loves power. He has relied on the government to build his businesses and that will be of great benefit to everything he does, so he will be very involved in the new administration, Gerber said. “The risk that most people haven’t mentioned is that Trump will quickly tire of big egos. It's one thing to be in the spotlight and use Elon's power to win. Once in office, dealing with Trump is a different matter, and he has many interests vying for his love. And if you remember last time, everyone who was close to him on day one was dead on day 35.”

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