Day: November 25, 2024

Elon Musk spent more than $100 million to help Donald Trump win the US presidential election. The billionaire will likely earn a lot more from the result – but how?

Last week, during a gathering – undoubtedly a celebration – at Mar-a-Lago, Donald Trump’s so-called Winter White House, someone shouted: “Where is the George Soros of the right?”

Soros, 94, is, of course, the bogeyman for the nationalist movements worldwide because he has long supported progressive and liberal political causes with billions of his own dollars.

So when Musk eagerly raised his hand – he has basically lived in Mar-a-Lago since Trump’s victory in the presidential election – nobody was really surprised. After all, the owner of SpaceX, Tesla, X, and other firms has helped US rightwingers quite a lot.

Musk bought Twitter, renamed it to X, and turned the platform into a right-wing echo chamber – others are allowed in, of course, but just to be constantly harassed and trolled.

Plus, the world’s richest individual then wholeheartedly endorsed Trump’s campaign, spending more than $100 million and saying that the Republican candidate must win because “civilization as we know it is on the line.”

Here’s where the analogy can be ended, though. Whereas Soros only has a net worth of $6.7 billion and has already donated more than $32 billion to his Open Society Foundations, Musk now stands to make much more money than he has given to Trump.

How exactly? In numerous ways, actually. And here’s our attempt to explain how Musk – who will also co-lead a new commission called the Department of Government Efficiency (DOGE) – will become even richer and more influential.

SpaceX the big winner

This week, Trump joined Musk in Texas to watch a successful test launch of SpaceX’s Starship rocket. That wasn’t an accident – SpaceX benefits from billions of dollars in US government contracts (nearly $20 billion since 2008), and is poised to secure more.

Musk’s company is already a major provider of launches to the International Space Station, also surpassing Boeing as NASA’s second most utilized contractor.

Now, SpaceX stands to receive billions more. Precisely Starship is how NASA intends to land astronauts on the moon for the first time in more than half a century. For the first two human landings under the Artemis program, SpaceX has been awarded more than $4 billion.

Besides, Musk simply loves the idea of a new NASA mission to Mars. Since the agency is reportedly considering dropping its own Space Launch System rocket program under the Trump administration and relying more on the private sector, SpaceX would probably be trusted with the task.

Musk recently posted on X: “Vote for @realDonaldTrump if you want humanity to make it to Mars!”

And indeed, Trump – as vain as he’s proven to be – represents the hope for the next big leap for SpaceX. It was Trump who created the US Space Force in 2019 so he could send federal dollars in the direction of Musk’s company after expanding the Space Force’s budget.

Finally, Trump is, of course, anti-regulation, and so is Musk. He’s publicly said that the requirements of the Federal Aviation Administration (FAA) are slowing Starship’s progress.

The FAA has proposed fines of $633,000 against SpaceX for violating regulations in launches of its Falcon 9 rocket.

Musk criticized the FAA in a series of X posts, saying that the agency is “smothering the national space program” and accused it of “improper, politically-motivated behavior.” However, the FAA’s administrator, Michael Whitaker, has always stressed that SpaceX needs to “operate at the highest level of safety.”

Tesla in the best possible position now

Just so it happens, the “first buddy” is in charge of another company which has regular skirmishes with the regulators – Tesla. To be more specific, the (in)famous electric vehicle company doesn’t really make safe cars, according to the National Highway Traffic Safety Administration (NHTSA).

In mid-October, right before the presidential election, the agency opened a new investigation into Tesla’s “Full Self-Driving” system after getting a fresh batch of crashes in low-visibility conditions, including one that killed a pedestrian.

Before that, there was a three-year investigation into the company’s less-sophisticated Autopilot system. Regulators found 467 crashes involving Autopilot, resulting in 54 injuries and 14 deaths.

It would seem that the NHTSA doesn’t believe the hype around Tesla’s vehicles such as Cybercabs and Robovans, and is keen to ensure that the company doesn’t lie about their features in public statements. It has also forced Tesla to do recalls it didn’t want.

Naturally, then, any cuts to the agency’s funding or staffing could help Musk’s EV firm. In a sign of what might be in store for the NHTSA, Musk recently said on X: “We finally have a mandate to delete the mountain of choking regulations that do not serve the greater good.”

Auto safety advocates are obviously worried that the DOGE co-chaired by Musk could propose draconian cuts at NHTSA – along the lines of what he did at Twitter after purchasing the platform.

Musk could try to slow or stop NHTSA investigations, and to hell with conflicts of interest or the fact that Tesla actually benefits from government tax incentives.

To be fair, Musk is now saying that the $7,500 federal tax credit for EV buyers should be eliminated. But this would even help Tesla as other automakers would probably cut back their expansion plans for the EV market and thus reinforce Tesla’s dominance.

During a Tesla earnings call in October, Musk also called for a “federal approval process for autonomous vehicles.” This would speed up approval of driverless cars by two or three years, analysts say.

“The future is autonomous electric vehicles. Nonautonomous gasoline vehicles will be like riding a horse and using a foot bone. It’s not that there are no horses. Yes, there are some but they’re unusual. They’re niche,” said Musk.

The market is reacting. Between Trump’s victory on November 5th and the close of trading last Friday, Tesla’s stock price went from $251.50 to $320.72.

According to Tesla’s filings with the Securities and Exchange Commission, Musk owns about 715 million shares. It means that the value of his stake has risen by almost $50 billion – that’s more than Musk paid for Twitter in 2022 ($44 billion).

Add to that the possibility that Trump’s administration will impose tariffs on imports from China, and it becomes clear that Tesla might also be protected from cheap – and high-quality – Chinese EVs.

When your middle name is Annoying

Even Dogecoin, the meme-based cryptocurrency, heavily promoted by Musk in recent years, has been benefitting from Trump’s triumph.

Since November 5th, its value has more than doubled – that’s a much bigger jump than what bitcoin has enjoyed. As a trolling exercise, Dogecoin might actually prove to be quite valuable.

X, the home of trolling, though, is bound for even greater success. The platform has lost most of its worth since Musk bought and began playing with it, but with Elon now playing “co-president,” scrutiny from federal regulators, worried about consumer data abuse, might go away.

Musk is on the inside and hard at work promoting his ideas of colonizing Mars and changing life on Earth. But it can be only a matter of time until he’s on the outside looking in.

Plus, major advertisers, having boycotted X over the network allowing weird content to appear next to their products and lifting suspensions of some of the most odious people on the platform, now seem to be slinking back.

A recent report from Adweek said that Comcast, Disney, IBM, and many other companies are returning to X because they obviously see that spending on the platform might be good for business.

For big businesses, it’s important to get in Musk’s good books and, by extension, those of Trump, ruthless logic dictates. Money indeed speaks volumes, especially if you want to stay out of the crosshairs of a certain someone – and who knows, X might still become profitable.

For years, Musk, Trump, and their allies have claimed that social media companies, especially ones owned by Meta, were illegally biased against them in a giant conspiracy. Oh, the irony – that’s all gone now.

“Musk has openly used his platform to boost Trump, attack his opponents, and shape the political narrative. The collusion between government and big tech is no longer a conspiracy theory – it’s out in the open,” Mike Masnick, founder and editor of Techdirt, wrote this week.

So far, it looks like Musk is more engaged with whatever is going on around Trump than most expected. He’s changed his X bio which now says: “The people voted for major government reform.”

But it’s not really fair to call Trump’s victory resounding as some do because not even 50% of voters cast their ballot in support of him on November 5th. Over 151 million Americans voted, but nearly 100 million, even though they were eligible, didn’t bother.

So if Musk thinks his ideas will be almost universally supported, he might be wrong. Besides, even though Trump seems to admire him so far, many of the President-elect’s allies do not – actually, a growing number of them think Elon’s utterly insufferable.

One source told Politico: “Elon is getting a little big for his britches.” Another remarked to NBC: “He’s trying to make President Trump feel indebted to him. And the President is indebted to no one.”

For now, Musk is on the inside and hard at work promoting his ideas of colonizing Mars and changing life on Earth. But it can be only a matter of time until he’s on the outside looking in – and that would definitely be very, very interesting.