Monday, December 2, 2024

Elon Musk bet big on Trump — and won. Will it pay off for Tesla?

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Tesla (TSLA) CEO Elon Musk’s embrace of President-elect Donald Trump is paying off for Tesla shareholders today. But the question investors are asking is what that burgeoning relationship will mean for them in the years to come.

Trump, who won in convincing fashion on Election Day, has been tied at the hip to Musk, who has backed Trump both in rhetoric and with big financial commitments.

Musk, the world’s richest man, recently added donations totaling $43.6 million to America PAC, his GOP super-PAC in early October. His total known political spend this year is now at over $132 million, as Yahoo Finance reported.

That’s one of the largest sums dedicated to a political candidate and a party. In response Trump has even promised Musk a position in his administration, suggesting Musk could head a commission to boost government efficiency.

Republican presidential nominee former President Donald Trump arrives at an election night watch party at the Palm Beach Convention Center, Wednesday, Nov. 6, 2024, in West Palm Beach, Fla. (AP Photo/Evan Vucci) · ASSOCIATED PRESS

Trump referenced Musk during his election victory speech early Wednesday morning, calling him a “super genius” and claiming that “we have to protect our geniuses. We don’t have that many of them.”

But Trump and Musk’s relationship hasn’t always been so rosy. It was only a couple of years ago, in 2022, when Trump denigrated Musk on Truth Social, the conservative rival social media platform to Musk’s Twitter (now X).

“When Elon Musk came to the White House asking me for help on all of his many subsidized projects, whether it’s electric cars that don’t drive long enough, driverless cars that crash, or rocketships to nowhere, without which subsidies he’d be worthless, and telling me how he was a big Trump fan and Republican, I could have said, “Drop to your knees and beg,” and he would have done it,” Trump wrote.

This was in response to Musk saying that Trump was too old to run for president again. Musk had purchased Twitter earlier that year and invited Trump to return to the platform, along with many other figures who were banned for offensive viewpoints.

Musk is an environmentalist and believes humanity must move beyond fossil fuels in order to save the planet — and if that means people should buy Tesla’s electric vehicles, then he’s all for it. Trump is an unabashed fossil fuel fan and has big plans to open up drilling and reverse emissions rules and subsidies for clean energy.

But Musk’s embrace of free speech, deregulation, and anti-woke policies pushed him closer to Trump and the GOP. A snubbing by President Biden at an EV summit stung Musk, who many feel did more than any single person to bring EVs to the mainstream in the US.

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