Musk’s political gamble will bring him huge benefits

From there, the relationship between the candidate and Musk grew stronger, who soon after appeared as a featured guest at several of his rallies while donating tens of millions of dollars to his campaign. Until reaching a figure which is – according to rumor – between 120 and 200 million dollars.

A past at the antipodes

For a long time, Musk was the typical Silicon Valley mogul: a revolutionary spirit who voted for what he surely saw as the lesser evil. That is: the Democratic Party. The trend began to change in 2016, when Pierre Thielone of the co-founders with Musk of the famous payment portal PayPal, appeared at the Republican National Convention to publicly express his support for Trump.

Musk, who had just voted for Barack Obamahe did not succumb to temptation and that year he opted for Hillary Clinton. He insisted on it four years later, when he again chose the Democratic Party and voted for Joe Biden. What’s more: A few years ago, he declared that “Trump should hang up his hat and sail into the sunset.” Retire, wow. But at some point in the recent past, something changed. The question is: what?

It could have been the management of the vaccination process after the first two years of the pandemic. Musk was vaccinated, but was very critical of Biden’s planned obligations to federal workers. Likewise, he never ended up believing the arguments advocating maintaining safety distances.

It could also be due to what he sees as excessive bureaucracy. “SpaceX can build a giant rocket in less time than it takes to get the government license to operate it,” he once said. “It’s crazy; At this rate, if no one reverses such excessive regulation, we will never reach Mars. »

Or it could have been the drift of a left which focused a good part of its discourse – and its struggle – on the famous identity politics. A phobia probably fueled by VivianJenna Wilsonthe mogul’s trans daughter and someone who has publicly accused him of being an abusive father. Musk called his daughter someone who has been “devoured by this virus called ‘woke’.”

To all of the above we can add how bad Biden felt when Biden, in his first year of presidency, did not invite Musk to an event on the future of electric cars held at the House White. To add salt to the wound, during the said event, Biden applauded Marie BarraCEO of General Motors, for “electrifying the auto industry.”

Knowing that Barra’s company sells in this specific sector one-fifth of what Musk’s automaker Tesla sells, Musk’s anger was superlative. As for the reason for Musk’s refusal to serve in the White House, his poor relations with unions are often cited.

What exactly will DOGE be?

There is still a lot to know about the new government office. From how it will be funded to where it will be located.

However, we know that Musk will share his leadership with Vivek Ramaswamya businessman linked to the world of biotechnology and whom Musk himself supported when he ran in the Republican Party primaries. A certain harmony is therefore assumed. At least until the criticism increases and the blame is distributed.

We also know that Musk wants to reduce the 438 federal agencies currently in existence to 99. At least that’s what he said in a recent interview with Tucker Carlsonthe influential presenter and fairground right-handed.

And he is known to be seeking to recruit “revolutionaries who favor shrinking government, have extremely high IQs and are willing to work 80+ hours a week in an unpopular austerity program.” According to Musk, he and Ramaswamy will personally lead the selection process.

What benefits can this bring to Musk?

Although some believe Musk’s support for Trump is ideologically genuine — “being the richest man in the world, Elon doesn’t need anything,” said one donor to the president-elect. Trevor Traina–, others think that there is a certain commercial calculation behind the alliance. The famous analyst Ian Bremmerfor example, said Musk’s support for Trump was “the best political bet I’ve seen him make in my entire career.”

If we pay attention to suspicions like Bremmer’s, the question is in what sense. In other words: how was the billionaire able to increase his fortune under the Trump presidency? In response, the experts point to two of the three companies with which it is usually associated: Tesla And EspaceX.

According to Bremmer, who as a geopolitics expert and president of the Eurasia Group consultancy regularly meets with heads of state and senior officials from countless countries, Musk reportedly assured senior members of the Chinese Communist Party that he was willing to serve as an intermediary between them and Trump regarding trade policy regarding the tech industry. And Tesla could benefit significantly from a relaxation of export controls that affect products such as semiconductors.

There is also the problem of cars that operate without a driver. Garrett Nelsonan analyst at CFRA Research, focused on what they call “financial intelligence” or – in simple Spanish – the preparation of reports that take the temperature and anticipate the future of specific companies or entire sectors, said to its customers that Trump’s victory will mean a big push for deregulation in favor of autonomous driving. In Money: Buy Tesla stock because you expect the price to skyrocket.

And then there is SpaceX. According to Svetla Ben-Itzhakprofessor of space and international relations at Johns Hopkins University, regarding their union, Trump and Musk agree on three fundamental aspects.

First: the expansion of humanity beyond our planet. In this regard, it is worth recalling that the space policy directive signed by Trump during his first term – more precisely on December 11, 2017 – highlighted the importance for the United States of sending astronauts back to the Moon to establish a permanent presence from which to facilitate human missions to Mars…and beyond.

Second: both support commercial participation in the conquest of space. In fact, the aforementioned directive specifically requires trade and international associations. A paradigm shift compared to what existed before and which Biden has maintained during his mandate.

And the third: Both Musk and Trump favor deregulation. The president-elect has already demonstrated this during his four years in office, when he approved another regulation aimed at reducing regulatory barriers to promote faster growth of the private aerospace industry. It is therefore more than likely that over the next four years he will continue his efforts in this direction.

Although there are also differences in criteria between the two – Musk has a more long-term view versus the short-termism of a space race-obsessed Trump and that’s why the former is considering share information with other powers – Ben-Itzhak believes the tandem will surely boost the commercialization of space. In other words: SpaceX will most likely face less regulation and substantial cost reductions.

Risks that might not be so risky

As in any operation, Musk’s bet – if there is truly commercial interest – carries its share of risk. As the veteran business journalist and auto industry expert explains: Chris Isidore In an article published on the CNN website, Trump’s sympathies for electronic cars are rare.

The president-elect called them too expensive for ordinary Americans, ineffective over long distances and, above all, a risk to American industry. For this reason It is possible that he will eliminate the subsidies and aid granted by Biden to the sector.

But Musk has already said he is not worried about the move because it would primarily affect traditional automakers trying to catch up. In other words: to your competitors. And this update cost Tesla a fair amount; In the first nine months of the year, Musk’s automaker lost 2% of its stock value for this reason. One of the biggest falls in company history.

So even what a priori could be considered a risk that could become an involuntary impulse. Or, to paraphrase Ian Bremmer, it is very possible that siding with Trump was an extremely smart political, economic and business gamble. Time will tell.