Trump's election victory is poised to bring Elon Musk billions in stock gains, but it could present challenges for his empire if the U.S. ramps up trade pressures on China.

No business leader backed Donald Trump's election efforts more prominently than Elon Musk. According to Federal Election Commission records, Musk donated nearly $119 million to a super PAC he created to support Trump and frequently appeared alongside the Republican candidate at campaign events.

Musk was seen conversing with Trump as they awaited the election results. When Trump emerged victorious, Musk posted a series of celebratory tweets on social media platform X. "The American people have given Donald Trump a clear mission after tonight's changes," he wrote. This stands in stark contrast to Musk’s stance in 2022, when he suggested Trump was too old for the presidency and advised him to "sail into the sunset." Trump had fired back, claiming Musk once "begged" him for government subsidies during his previous term. Everything shifted in the final stretch of this year’s presidential race.

"Musk bet big. He went all-in on this election," commented Daniel Ives, a tech analyst at asset management and brokerage firm Wedbush Securities based in Los Angeles. In return, the tech mogul stands to gain significant political and economic benefits from Trump’s victory.

Steve Nelson, a political scientist at Northwestern University, noted that for ultra-wealthy individuals like Musk, who are beyond financial concerns, political influence often becomes a focus. Musk has engaged in politics through substantial financial backing of favored candidates rather than pursuing office himself.

As a South African-born individual, Musk cannot run for U.S. presidency but is technically eligible to seek other government positions. However, the world’s richest man seems uninterested in these roles, preferring instead to shape policy through his connection with Trump, who will occupy the highest office.

"For someone like Musk, he likely has a strong personal interest in pushing specific policies indirectly," said Nelson.

Trump had hinted that Musk might be appointed as Secretary of Government Efficiency (DOGE), though accepting such a role would require Musk to step down from leading companies like Tesla or SpaceX. Musk is more likely to join a government efficiency oversight committee than hold a formal cabinet position. "Musk seeks a political platform to better advance his goals without relying on others," Nelson stated. "His ethos centers on efficiency and a clear agenda with cutting-edge technology."

Musk’s support for Trump has yielded immediate gains. On November 6, the day following Trump's victory, Tesla’s stock surged 13% at market open, boosting Musk’s wealth by over $15 billion. This translates to a 12,761% return on the $119 million Musk invested in the pro-Trump super PAC.

It marked Tesla's largest stock increase in two years, following a challenging period during which its shares rose by only 1% year-to-date as of November 5 market close. Still, Tesla faces potential risks even with Trump’s win. Trump has publicly criticized electric vehicles, calling them too expensive, limited in range, and harmful to jobs and the U.S. auto industry. He has vowed to end what he described as "Biden's EV mission," despite no specific policy existing under that label.

During Joe Biden’s presidency, the U.S. government heavily supported electric vehicle initiatives, including billions in loans to encourage automakers to invest in domestic EV and battery manufacturing, the expansion of charging infrastructure, and a $7,500 consumer tax credit for EV purchases.

Industry experts believe Trump may end such programs. He could direct the Treasury Department to alter eligibility criteria for consumer tax credits, significantly limiting access, or, with a Republican-controlled Congress, pass legislation eliminating them altogether.

Musk has expressed indifference toward the potential elimination of EV tax credits, framing it as a competitive advantage for Tesla over legacy automakers entering the EV market.

"Let’s get rid of subsidies. It will only help Tesla," Musk tweeted in July.

Amid increasing competition, Tesla’s global sales fell by 2% during the first nine months of the year compared to the previous year. While third-quarter revenue and profits improved, it marked the company’s first year-over-year decline since its founding. According to analyst Ives, Tesla's greater challenge lies in the possibility of a renewed trade war between the U.S. and China under Trump.

"Trump will be much tougher on China, which could overshadow Tesla’s benefits," Ives stated. "Tesla’s Shanghai plant is critical for global revenue and profit. With over 40% of its orders from China, Tesla would be caught in the crossfire."

Tesla could also face complications if Musk is appointed to oversee a government waste-reduction commission, diverting his attention from Tesla operations. "Musk may spend more time away from Tesla at a time when investors want him focused on the company," Ives added.

Musk’s other major enterprise, SpaceX, is expected to remain relatively unaffected. Its chief competitor, Boeing, has encountered severe issues with the spacecraft NASA contracted to ferry astronauts to and from the International Space Station (ISS).

Musk’s ownership of social media platform X has faced widespread criticism, particularly from Democrats accusing it of spreading misinformation. Despite this, it has not been shut down or hampered by government action, even under Biden’s administration.

Trump's new administration is unlikely to impose restrictions on X either. While Musk has faced financial losses since acquiring the platform, it constitutes only a small portion of his total net worth. Musk purchased Twitter for $44 billion in 2022, rebranding it as X. He subsequently laid off many employees, reinstated controversial accounts, including Trump’s, and alienated advertisers. This caused a significant user exodus, leaving the platform worth just one-fifth of its purchase price.

But Musk appears unperturbed.

"There are wealthy individuals who prioritize accumulating more wealth and view the world through a business-focused lens," said David Faris, a political science professor at Roosevelt University. "Then there are individuals like Musk, who are wealthy enough to spend $44 billion on Twitter without a second thought. He builds wealth in ways that defy economic explanation."

(According to CNN, AFP, Reuters)

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