Business Standard

Monday, December 23, 2024 | 10:47 AM ISTEN Hindi

Notification Icon
userprofile IconSearch

Musk's ties to Trump likely to reverberate through Tesla, other interests

Musk donated millions of dollars to Trump's campaign. Trump has said he would establish a government efficiency commission headed by Musk

Donald Trump, Elon Musk

Tesla shares jumped 12 per cent on Wednesday after Trump defeated Vice President Kamala Harris. | Image: Shutterstock

Reuters

Listen to This Article

Billionaire Elon Musk stands to benefit greatly from his ties with US president-elect Donald Trump after the Tesla CEO became one of Trump's most important supporters during the 2024 campaign. 
Tesla shares jumped 12 per cent on Wednesday after Trump defeated Vice President Kamala Harris. Musk donated millions of dollars to Trump's campaign. Trump has said he would establish a government efficiency commission headed by Musk to cut federal spending. 
His influence is expected to be significant at a time when Musk already holds considerable power owing to his role as a major contractor with the US Department of Defense through his ownership of the Starlink satellite broadband system and as CEO of Tesla. 
 
Musk was a beneficiary of some policies Trump disliked, including the solar and electric-vehicle credits included in the Inflation Reduction Act passed by President Joseph Biden in 2022. Trump's desire to reduce EV mandates may hurt Musk's competitors more than it hurts Tesla due to its volume of sales. 
"Nobody is making money in EVs aside from Tesla, so the reduction or elimination of EV credits will widen Tesla's competitive moat," said Garrett Nelson, vice president and senior equity analyst at CFRA Research. 
Shares of EV companies Lucid Group and Rivian Automotive fell 2.9 per cent and 7.8 per cent, respectively. In addition, Trump's promises to levy heavy tariffs on Chinese imports, particularly on EVs, would shield Tesla from that competition, analysts said. 
Shares of China's BYD dropped 2.3 per cent overnight. 
It is not clear how Musk will address his conflicts of interest in the autos, space, health, construction and artificial intelligence industries or whether he will leverage the interests during a Trump administration that takes a hands-off approach to regulation. 
A role overseeing deregulation and cutting spending would give Musk "influence over US policy on AI, space exploration and EVs – all which Musk has a direct interest in via Tesla and other ventures," said Mamta Valechha, consumer discretionary analyst at Quilter Cheviot. 
Musk may try to wield his influence to reduce regulatory oversight of his businesses. He has been a vocal critic of federal review of his SpaceX rocket business and wants to speed up approval of his autonomous driving technology. 
He is also a big proponent of carbon-free energy, as Tesla is a major supplier of solar systems and batteries. Trump has promised to kill the offshore wind industry and rescind all unspent funds under the Inflation Reduction Act –Biden's signature climate law. 
However, Republican-dominated states have seen big gains from the law; Musk is building his second US electric vehicle factory in Texas.   
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
 

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Nov 06 2024 | 10:31 PM IST

Explore News