Whereas Musk’s personal sector successes are plain, the federal government isn’t a enterprise. Streamlining a federal funds within the trillions of {dollars} is extra nuanced than mass firings and comes with robust selections about how public companies are allotted. A lot of what DOGE has completed in its quick life up to now is performative, albeit headline-grabbing and deeply disruptive. Furthermore, one in all Musk’s most outstanding failures up to now couple of years concerned Tesla touting, after which not delivering, a low-price electrical automobile.
The surge in worth of Musk’s numerous companies since Election Day exhibits traders consider he stands to achieve financially. Musk’s estimated internet price approached half a trillion {dollars} in mid-December, in line with knowledge compiled by Bloomberg. The worth of his largest and most liquid asset, a 12.8% stake in Tesla, virtually doubled within the six weeks after the election, taking the corporate’s market capitalization to greater than $1.5 trillion. In the meantime, carefully held House Exploration Applied sciences Corp., often known as SpaceX, was revalued 67% greater in an equity-raising spherical in December, making it the world’s most-valuable tech startup. Even X Holdings Corp. is reportedly in talks to boost new cash at a valuation matching the $44 billion Musk paid for the sputtering social media firm just a few years in the past, a outstanding turnaround that displays the spur to advertisers that has come from its proprietor’s ties to authorities in addition to a stake in synthetic intelligence enterprise xAI.
The advantages to Musk are, nevertheless, unfold erratically throughout his empire and include dangers. Tesla’s inventory has given up greater than 80% of its Trump bump as traders consider whether or not his preoccupation with DOGE advantages the corporate sooner than it corrodes the model and offsets current weaknesses. Gross sales plunged 45% final month throughout Europe whilst rival EV makers skilled a lift in demand. Though SpaceX seems to be in an enviable place, Trump’s patronage is hardly indubitable. And Musk’s demonization of Democrats might depart the rocket developer uncovered when energy shifts once more in Washington. Additionally, the extra outstanding Musk turns into, the extra doubtless that questions on conflicts might be requested, main extra People to surprise in regards to the knowledge of 1 man controlling so many corporations with vital applied sciences spanning media, transportation and communications intertwined with authorities, some with nationwide safety implications.
The three most blatant potential advantages to Tesla from Musk’s function in authorities concern regulation, entry to overseas markets and federal procurement. All look nebulous in contrast with the actual issues circling the corporate. Trump’s deregulatory agenda, amplified by DOGE’s mass firings, portends a hollowing out, and probably cowing, of presidency our bodies accountable for scrutinizing Tesla. These embrace the Nationwide Freeway Visitors Security Administration, the Nationwide Labor Relations Board, the Securities and Trade Fee and the Division of Justice. A lighter contact on Tesla’s autonomous automobile ambitions plus, maybe, supportive federal laws round self-driving automobiles are significantly intriguing prospects for traders. There’s much less right here than meets the attention. Tesla’s massive downside isn’t overbearing regulators; it’s an undercooked product. Musk has been advertising and marketing a robotaxis-everywhere imaginative and prescient for years. That he now touts as a victory the approaching launch of a geofenced service in only one US metropolis — one thing rival Waymo LLC has carried out for a while — really represents a giant climbdown. It additionally isn’t clear that federal robotaxi laws is even wanted to foster deployment, as Waymo’s growth exhibits. Furthermore, any try to lighten regulatory oversight might undermine public belief in robotaxis.
Musk’s current sit down with Prime Minister Narendra Modi of India demonstrated how Musk can use the White Home as his private assembly room with world leaders. Once more, it sounds bullish, however Tesla’s push into India might be topic to progress on a wider US-India commerce deal, with Trump calling the concept of any Tesla manufacturing unit being constructed there “unfair” to the US.
Equally, a murky story a couple of State Division proposal to purchase $400 million price of “armored” Tesla EVs seems to carry out the prospect of federal {dollars} flowing on to Tesla. The plan was apparently rescinded after media scrutiny, however, even when it wasn’t, Tesla would wish numerous these to offset its largest, all-too-tangible downside: Faltering EV gross sales worldwide.
Proof is mounting that Musk’s embrace of far-right politics is deterring prospects in key markets similar to California and Europe, which collectively accounted for an estimated 30% of Tesla’s EV gross sales in 2024. YouGov carried out polls in Germany and the UK in mid-January that discovered Musk was seen unfavorably and that his meddling within the international locations’ politics was unwelcome, in line with Bloomberg Information. Then there’s Trump’s animosity towards EVs, which poses an extra menace, since, as a lot as Musk touts libertarian rules, Tesla has turn out to be more and more depending on subsidies to spice up flagging revenue margins.
Not like with Tesla, SpaceX entered the DOGE period with momentum. Musk has monumental leverage over the business area trade and NASA as a result of SpaceX, wherein he holds a 42% stake, in line with knowledge compiled by Bloomberg, developed a rocket-launch system that’s about 90% cheaper than previous options. Additionally, its Starlink satellite tv for pc communications unit has business and strategic enchantment to governments and people worldwide. Not that Trump’s victory isn’t priceless to SpaceX. The potential advantages for such an organization — one that’s regulated by and indicators contracts within the a whole lot of hundreds of thousands of {dollars} with a federal authorities the place Musk has broad attain — look far clearer than for Tesla.
Trump says Musk received’t deal straight with space-related points in his DOGE work. Even when that proves to be the case, affect over budgets and headcount, plus the power to talk on to the president, provide probably efficient methods to form federal companies. Most related are the Federal Aviation Administration, which regulates something that flies, and NASA, SpaceX’s largest buyer. Musk is pushing the FAA to improve its info know-how networks with Starlink’s satellite tv for pc web terminals, looking for to ship 4,000 of them to the company, and at the least one has already been put in, Bloomberg Information reported. (It’s not clear how this impacts a $2 billion contract awarded in 2023 to Verizon Communications Inc. to enhance the nationwide airspace system. It’s additionally not clear who on the company could be keen to say “no” to Musk and danger blowback from Trump.)
Then there’s a current govt order the place Trump sought extra management over unbiased companies together with the Federal Communications Fee. Starlink relies on FCC approvals to launch and function its 7,000 low earth-orbit satellites. The Pentagon had been working with SpaceX earlier than Trump took workplace on a militarized model of Starlink’s service referred to as Starshield.
Musk’s affect additionally issues for SpaceX opponents similar to Boeing Co. and Lockheed Martin Co., which have struggled to maintain tempo. Think about that Musk simply referred to as for early retirement of the Worldwide House Station, which represents a major contract for Boeing. As a substitute, Musk would have NASA concentrate on his private obsession, and a stretch objective for SpaceX, of sending astronauts to Mars. The state of affairs is much more delicate for startups similar to Rocket Lab USA Inc., which seeks to emulate SpaceX’s end-to-end satellite tv for pc service by way of partnerships and can depend upon even-handed regulators to pave the way in which for its rocket growth and launches.
SpaceX and Starlink even have nationwide safety and geopolitical dimensions. World leaders looking for to win favor with Trump current a possible boon, even when Musk isn’t straight concerned. That could be the case in Vietnam, which is planning to vary a legislation that restricts overseas possession of telecommunication companies corporations. The modifications would permit Starlink, which has been in talks with that authorities for years, to deploy its system whereas sustaining full possession.
That’s not practically as direct because the strain, with Trump’s assist, that Musk utilized to South Africa President Cyril Ramaphosa to chill out a legislation aimed toward redressing the racial inequality wrought by apartheid. The legislation would pressure SpaceX in South Africa — Musk’s birthplace — to allocate a 30% shareholding to traditionally deprived teams. Arguing with Ramaphosa on X, Musk labeled the legislation “racist.” Days later, Trump signed an govt order decrying a South African legislation on expropriations in addition to the nation’s stance on Israel. In one other slap at Ramaphosa, none of Trump’s cupboard members will attend the Group of 20 assembly that South Africa is internet hosting. Coincidence, maybe, and up to now SpaceX hasn’t received an exemption from the legislation, as talks have stalled.
What units Musk other than an extended line of company titans with a style for political energy is his technique. Somewhat than the standard hedging of bets given the tendency for energy to shift between the 2 events each few years, Musk’s embrace of Trump and the MAGA motion is, to make use of a popular phrase of his, laborious core. Musk maybe regards November’s election end result as representing some form of structural change, with the Democrats he now overtly disdains unable to regain energy. This might be an odd assumption, on condition that Trump received with lower than half the favored vote and Republicans barely gained management of Congress. It will even be a deeply troubling one, given Trump’s authoritarian impulses, expressed most viscerally in his try to overturn his election defeat in 2020.
It’s attainable the world’s richest man, with affect stretching from smartphone screens to area journey and now the White Home, merely regards himself as untouchable. That will clarify why somewhat than simply being a giant donor discreetly looking for the odd favor, Musk has determined to turn out to be an energetic participant in a sport that would prolong even past DOGE’s deliberate expiration in July 2026.
Such a gambit brings nice energy but in addition danger to him and his corporations. Slightly below half of People say they disapprove of the job Musk is doing, in line with a Washington Put up-Ipsos ballot. Latest protests at Tesla showrooms additionally attest to a backlash gathering. In China, house to Tesla’s largest EV manufacturing unit, Musk’s function as Trump-whisperer might translate to favor for his operations there or as simply make him a goal for Beijing.
Above all, Musk’s peculiar function as a freewheeling senior adviser to the world’s strongest individual might make it simpler for Trump responsible him when issues go awry, casting him apart like so many others in Trumpworld after they stop to be helpful. The founding precept of US governance is that energy is neither absolute nor everlasting. That Musk acts as if that isn’t essentially the case is probably his largest vulnerability. Or ours.
