Why Elon Musk could be the biggest winner of Donald Trump's second term

Prior to the 2024 election, billionaire Elon Musk bet big on Donald Trump.

And it seems like that bet has paid off with former president Donald Trump taking what seems to be an unassailable lead over Vice President Kamala Harris in the Electoral College.

Trump has 267 of the 270 votes needed to clinch the presidency.

He has won Georgia, North Carolina and Pennsylvania though Michigan and Wisconsin remain too close to call.

Trump, during his victory speech to his supporters, gave a call out to Musk, the owner of X and one of his biggest backers.

“We have a new star. A star is born: Elon,” Trump said.

“He’s an amazing guy. We were sitting together tonight. You know, he spent two weeks in Philadelphia, in different parts of Pennsylvania, campaigning.”

Musk and Trump spent election night together at the former president’s Mar-A-Lago estate in Florida.

But why could Musk be the biggest winner of Trump’s second term?

Let’s take a closer look:

Tesla shares jump

Tesla shares have jumped 12 per cent on the US stock market in anticipation of the richest man in the world benefitting from Trump getting another term in office.

Experts say Tesla is likely to benefit greatly under Trump.

“We believe a Trump presidency would be an overall negative for the EV industry as likely the EV rebates/tax incentives get pulled, however for Tesla we see this as a huge positive,” Wedbush Securities’ managing director Dan Ives wrote in a note to clients as per CNBC.

““Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYD, Nio, etc.) from flooding the US market over the coming years,” he continued.

This jump in Tesla’s share price also further inflates the fortune of the world’s richest man, who has a net worth of around $264 billion.

Musk currently owns around 22 per cent of Tesla – around 715 million shares.

Subsidies from government

Musk has also been a huge beneficiary of government contracts.

As per The New York Times, Musk’s companies have been awarded contracts worth $3 billion by the government just over the past year.

Though he has been dismissive of government subsidies in public, his private behaviour is quite different.

“Elon tends to say he’s hostile to subsidies while Tesla is gobbling them up like a hungry Godzilla,” said Mike Murphy, a Republican strategist who runs the EV Politics Project, a Los Angeles-based advocacy group that seeks bipartisan support for electric vehicles.

Tesla too has lobbied the government for regulations that would ban the production of most new gasoline cars by 2035 – the so-called “EV mandate” that Trump and others on the American right have criticised.

Whatever Musk’s endgame, the public record clearly shows that Tesla, since its founding over two decades ago, has benefitted from government assistance, largely because of its role in moving the US toward cleaner cars. Tesla’s first major manufacturing facility, in Fremont, California, was developed with the help of a $465 million loan from the U.S. Department of Energy, repaid three years later.

More recently, Tesla has reaped almost $9 billion since 2018 by selling what are known as “regulatory credits, opens new tab,” securities filings show. The credits, awarded in the US by the federal and state governments to manufacturers who surpass increasingly strict emissions rules, can be sold to other carmakers who are unable to comply.

Influence over the government

Musk could have unprecedented influence over the federal government under Trump.

Musk took to X to post a photoshopped image of himself carrying a sink into the Oval Office with the caption, “Let that sink in.”

It’s a reference to when he took over Twitter, now X, and began shaking up operations at the social media company.

The former president had vowed to appoint the billionaire as the head of an efficiency task force if elected.

Trump has said Musk, the world’s richest man, would help him streamline government.

Musk, in turn, has vowed to cut trillions from the federal budget.

“Your money is being wasted, and the department of government efficiency is gonna fix that,” Musk said at Trump’s Madison Square Garden rally. “We’re going to get the government off your back and out of your pocketbook.”

Musk earlier gave $75 million to Trump’s Political Action Committee.

This apart from giving his own America PAC around $120 million ahead of the polls.

Musk also held a $1 million sweepstake in Pennsylvania for swing voters.

He even hosted an X-Space event with Trump and appeared at some of his campaign rallies in Pennsylvania.

With inputs from agencies

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