What Trump's re-election as president means for Elon Musk

• Elon Musk used his money, power and influence to re-elect former President Donald Trump.
• Now he is likely to benefit from ties to the president-elect and potentially take on a government role.
• Trump has also promised to ease regulations, which would benefit Musk and his companies.

Elon Musk's campaign to support Donald Trump has paid off – and the billionaire has a lot to gain in the next four years.

Musk has spent months strengthening his ties to Trump and using his platform on X to advocate for him over $130 million invested in pro-Trump efforts. At one event he said that “the future of civilization is at stake.” He even promised to give away $1 million a day to swing state voters who sign his petition for free speech and gun rights.

Business Insider spoke with experts ahead of the election about Musk's involvement in the campaign. Some suggested Musk's actions could be a risk-hedging strategy to ensure Trump's support if he wins. Cary Coglianese, a law professor and director of the Penn Program on Regulation at the University of Pennsylvania, said Musk may only see himself as capable of “reshaping the federal government.”

Regardless of his motivations, the billionaire is likely to benefit from Trump's second term in the White House. Erik Gordon, director of entrepreneurial studies at the University of Michigan's Ross School of Business, puts it this way: “Friends of the winner share the prize.”

Trump has supported Musk's idea of ​​a “Ministry of Government Efficiency.”

Trump has agreed to accept Musk's proposal to create a “Ministry of Government Efficiency” led by Musk. The president-elect said this will conduct a “full financial and performance audit of the entire federal government.”

The role could give Musk influence at agencies he has long complained about, such as the Securities and Exchange Commission, which is investigating his 2022 acquisition of Twitter, now called X, and sued him in 2018 over a tweet in which he claimed he has the financing to take Tesla private.

At a recent rally in Pittsburgh, Musk said he discovered that there are 428 federal agencies. “Why the hell do you need 428 agencies? Why do you even need 100? This is crazy,” he said. During an Oct. 18 town hall meeting in Pennsylvania, he proposed laying off federal employees.

Musk has already suggested using the role to his advantage. During Tesla's recent earnings call, Musk suggested that if there was a state efficiency commission, he would help advance the federal approval process with a “federal autonomous vehicle approval process.”

What a Trump victory means for Musk's business empire

Aside from direct influence within the government, a Trump presidency could lead to many successes for Musk's business empire, which includes Tesla, SpaceX, The Boring Company, Neuralink and X. Many of these companies rely heavily on government permits, regulations, subsidies or contracts — and Trump has promised a looser regulatory landscape with lower corporate and personal taxes.

Gordon said regulators would give Musk “more freedom to develop advanced technologies” under Trump.

Lighter regulation could be crucial for Tesla, especially as investors closely monitor Musk's commitment to allowing fully autonomous vehicles in Texas and California.

Francesco Trebbi, a professor of economics and public policy at the University of California, Berkeley, told BI that a Trump presidency could help SpaceX secure large contracts with the Department of Defense. The company has recently made major strides in space travel and this kind of support could help it maintain a competitive edge over rivals like Blue Origin.

There are some risks ahead

While Musk has a lot to gain in the next four years, his approach to Trump is not without risk – and there is no guarantee that everything will go as planned.

According to Karoline Leavitt, the campaign's national press secretary, Trump intends to withdraw unspent funds from the Inflation Reduction Act (IRA) to “quickly combat inflation and reduce prices.” The IRA offers benefits to Tesla, such as a $7,500 tax credit for new electric vehicles and solar tax credits.

Coglianese said Musk is also “banking on a president who is willing or willing to repay Musk's loyalty.” But he said it's not always clear that Trump's strongest supporters are getting everything they want.

As an example, he cited billionaire investor Carl Icahn, who served as an unpaid adviser to Trump during his first term in office. Icahn reportedly received relief from the Environmental Protection Agency for an oil refinery he owned ended with resignation amid criticism of possible conflicts of interest.

Joan MacLeod Heminway, a law professor at the University of Tennessee, told BI that there are “ethical rules that require compliance with a number of obligations,” such as reporting conflicts of interest.

“Elon Musk may not want to take on these obligations,” Heminway said.