How a second Trump term could further enrich Elon Musk: ‘There will be some quid pro quo’

Donald Trump owes his decisive 2024 presidential victory in no small part to the enthusiastic support of the world’s richest man. In the months leading up to the election, Elon Musk put his full weight behind the Maga movement, advocated for Trump on major podcasts and used his influence over X to shape political discourse. Musk’s America Pac injected nearly $120m into the former president’s campaign.

Now, Trump is looking to return the favor. Speaking with reporters last month, he said he would appoint Musk as “secretary of cost-cutting”. Musk, for his part, has joked he would be interested in serving as head of the “Department of Government Efficiency” (Doge) with a stated goal of reducing government spending by $2tn. Practically speaking, experts say those cost cuts could result in deregulation and policy changes that would directly impact Musk’s universe of companies, particularly Tesla, SpaceX, X and Neuralink.

Trump administration officials, eager to maintain Musk’s support, may similarly loosen rules and reassign federal government officials to benefit Musk’s interests. It’s an explicit, openly transactional relationship unlike any seen in recent US political memory, experts said.

“We’ve seen lobbying efforts, we’ve seen Super Pacs, but this is a different level we’ve never seen before,” said Gita Johar, a professor at Columbia Business School. “There will be some quid pro quo where he [Musk] will benefit.”

Pausing for a moment, Johar added: “‘Conflict of interest’ seems rather quaint.”

Trump: bad for electric vehicles, good for Elon

Tesla is already reaping the benefits of a second Trump administration. On Wednesday, just hours after the Associated Press official called the race in favor of Trump, the car company’s stock shot up 13% to a 52-week high. By the end of the week, Tesla reached $1tn in market capitalization, its highest valuation in two years. Musk’s own fortune shot up $26bn with the stock.

That might seem odd considering the former president’s vocal disdain for electric vehicles. In recent years, the president-elect has referred to efforts to promote environmentally friendly cars as a “Green New Scam” and claimed EVs simply “don’t work.” He has also pledged he would end Joe Biden’s “electric vehicle mandate” on his first day in office. Biden has implemented tax credits and emissions standards that favor electric vehicles.

But Trump’s hardline rhetoric against EVs started to soften almost immediately after Musk pledged his support for the candidate. Trump himself has been explicit about the reason for his shifting outlook.

“I’m for electric cars,” Trump said during a campaign event in August. “I have to be, because Elon endorsed me very strongly.”

Still, experts agreed a Trump administration will likely roll back tax credits for consumers looking to buy new electric vehicles. That would hurt newer EV startups and legacy carmakers that are still trying to bring down the costs of manufacturing their vehicles. By contrast, eliminating those credits may be a boon to Tesla since the company has already made extensive use of those credits to capture a commanding lead in the EV market in the US.

Trump with his wife Melania and son Barron before his victory speech on Tuesday night. Photograph: Jim Watson/AFP/Getty Images

“Tesla has the scale and scope that is unmatched,” Wedbush analyst Dan Ives said in a recent note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment.” For the rest of the electric vehicle industry, though, Trump presidency would be “an overall negative”, Ives wrote.

Tesla will also find itself caught in the middle of Trump’s much-vaunted but still vague tariff proposals. Though auto tariffs could help insulate Tesla from cheap, competitive Chinese electric vehicles entering US markets from the likes of BYD, stiff import taxes would simultaneously make it much more expensive to manufacture new cars. Tesla’s supply chain is highly dependent on goods and materials from China. Steel tariffs would likely drive up the cost to produce the company’s Cybertruck, while tariffs impacting rare earth metals and minerals sourced from China would also drive up costs of semiconductors crucial to powering the fleet’s cameras and sensors.

“If there is a general tariff, the price of those will skyrocket,” George Mason University Mercatus Center research fellow Matt Mittelsteadt said in an interview. “You can’t re-shore what you can’t make.” Tesla did not respond to requests for comment.

Clearing a road for Musk’s autonomous vehicles

Experts say Musk’s role in the Trump administration could help chart the path for Tesla’s autonomous vehicle rollout. The company is currently being investigated by the National Highway Traffic Safety Administration (NHTSA) over the role its Autopilot and “full-self driving” features may have played in a spate of accidents, including more than two dozen fatal ones. A Trump administration favorable toward Musk’s business interest could wind down those investigations.

“The specific worry with Musk and NHTSA is that the Trump administration might influence the decisions that civil servants are making to benefit the business interests of Tesla,” Cardozo School of Law professor and tech regulation expert Matthew Wansley said.

Musk has also explicitly said he would try to leverage his influence in a Trump administration to streamline regulations around fully autonomous “driverless” vehicles like those operated by Waymo and Cruise. Though Tesla vehicles aren’t currently capable of the same level of autonomy, Musk recently revealed the concept for a more advanced “Cybercab” robotaxi he says will operate without a steering wheel.

Current safety regulation for this level of autonomous vehicles varies by state and generally require years of testing with humans behind the wheel. Musk advocated for a “federal approval process” that would preempt those strict state rules during a third-quarter Tesla earnings call. If that weaker federal process were to be approved, Tesla may have a shorter climb to catch up with more advanced competitors.

SpaceX could win lucrative government contracts for a Starlink rollout and a Mars mission

Few of Musk’s endeavors have benefited as directly from government partnerships in recent years as SpaceX. The private space company secured a $3bn federal contract in 2021. It is currently competing with Jeff Bezos’ Blue Origin for a series of contracts with the US Space Force worth some $5.6bn. Musk has already asked Trump to appoint SpaceX employees to top government positions, according to the New York Times.

Experts agreed Musk’s relationship with Trump would strengthen its position as a top contender for space contracts. Mittelsteadt says recent Republican opposition to the Biden administration’s beleaguered rural $42.45bn broadband initiative could also open up a new path for SpaceX’s Starlink satellite internet service. A GOP-led Federal Communications Commission, Mittelsteadt argued, could decide to pay SpaceX to expand Starlink access nationwide. Trump lauded Starlink’s role in providing internet access to hurricane survivors during a speech on election night.

“The ceiling for what he could possibly get out of government contracts could be raising,” Mittelsteadt said.

Trump and Musk also appear united in their interest in sending a rocket to Mars. The president-elect has repeatedly praised Musk’s “beautiful, shiny white” rockets on the campaign trail and has said he wants to land a rocket on the red planet before the end of his next term.

“We will land an American astronaut on Mars,” Trump said during an October rally.

Musk, meanwhile, has repeatedly emphasized his dream of colonizing Mars and creating an interplanetary human species. Equally as often, he has criticized the Federal Aviation Administration (FAA) for bureaucratic “superfluous delays.” A favorable Trump administration could feel motivated to soften those rules and guidelines, experts said. SpaceX did not respond to a request for comment.

Trump could reduce scrutiny on Neuralink and X

Telsa and SpaceX aren’t the only Musk-owned properties that stand to thrive during a second Trump term. Neuralink, Musk’s brain-computer interface company, has drawn scrutiny from the US Food and Drug Administration over alleged issues related to record-keeping and quality controls for its animal testing. A more favorable FDA under the Trump administration could help wind down those inquiries and provide a clearer runway for the company’s future experiments. Neuralink did not respond to a request for comment.

X, which Musk acquired in 2020 for $44bn, could likewise benefit during a Trump term. The platform served as an important, invaluable resource for spreading pro-Trump rhetoric during the 2024 presidential campaign. Johar, whose recent research dives into X’s rise, said its utility to Trump makes it unlikely to draw regulators’ ire under him.

“I don’t see any guardrails going up in terms of verifying the truth of information that’s already gone by the wayside since X was taken over,” said Johar.

‘Conflict of interest seem rather quaint’

The scope of Musk’s influence in the Trump administration and US politics more broadly is just beginning. The billionaire said last week in a conversation livestreamed on X that he will continue pouring money into America PAC, his organization founded this summer to support Trump’s bid for president, and has plans to “weigh in heavily” on future elections like the 2026 midterms.

“It’s impossible to imagine how much influence Elon Musk could have in this administration because there’s no precedent,” University of California Berkeley professor Dan Schnur said. “He could have spent over a billion dollars, and it would’ve still been an incredibly savvy investment for him.”

Experts speaking to the Guardian unanimously agreed Musk’s potential efforts to influence policies that could directly impact his business would constitute a clear conflict of interest. Whether or not the billionaire faces substantive penalties, however, remains to be seen. Musk and the allied Trump administration could face a barrage of lawsuits alleging misconduct, but litigation alone may not prevent Musk from achieving his preferred policy agenda, experts predicted.

“There are all sorts of potential conflicts of interest. The question is whether that bothers Trump or not,” Schnur said. “It’s a reasonable bet to assume that it does not.”

Musk has said he would attempt to trim $2tn in government spending if appointed to the cost-cutting position in the Trump White House. Though he hasn’t fully outlined how he would achieve such a goal, the billionaire has suggested much of that belt-tightening could come from eliminating what he sees as redundant government workers and reducing overly burdensome regulations. But Mittelstead says Musk will likely face an uphill battle if tries to apply a “move fast and break things” attitude toward US government positions.

“The type of cost-cutting, slash-and-burn approach that he brought to Twitter is not possible in the public sector,” Mittelstead said.

It’s also an open question as to whether or not Musk and Trump’s newfound relationship can withstand the weight of two notoriously volatile personalities. Musk made headlines in 2017 when he stepped down from a pair of Trump advisory councils after disagreeing with the then-president decision to exit the Paris Climate Accords. Trump, for his part, has previously referred to Musk as a “bullshit artist”.

“They’ve appeared to have developed a very strong personal rapport,” Schnur said. “But they’re also two of the most volatile personalities on the set and earth.”