Billionaire tech mogul Elon Musk has officially backed former President Trump’s campaign, a move seemingly at odds with his interests as CEO of Tesla given the former president’s antagonistic stance toward the electric vehicle (EV) industry.
However, Tesla could stand to benefit from Trump’s proposed drawdown of the Biden administration’s EV subsidies, while Musk’s other companies and the billionaire himself could also reap rewards from a second Trump presidency, experts said.
Musk endorsed Trump earlier this month, shortly after the former president was injured in an assassination attempt at a campaign rally in Pennsylvania. He also pledged to donate millions of dollars to support Trump’s campaign, though he has walked back the amount he would commit.
The endorsement marked a turning point for the billionaire, who had long been drifting to the right politically but had yet to fully embrace Trump.
While Musk’s rightward shift has aligned him with Trump on many fronts — especially immigration — the former president’s vows to end President Biden’s EV policies would initially appear to be a drawback for the Tesla CEO.
“I will end the electric vehicle mandate on day one,” Trump said in his address at the Republican National Convention last week, claiming he would save “the U.S. auto industry from complete obliteration.”
Musk’s EV company is central to his status as the world’s richest person. He holds about $120 billion worth of shares and options in Tesla, constituting the majority of his wealth, according to The Washington Post.
However, Musk has argued in recent days that eliminating Biden’s EV policies, including a $7,500 federal tax credit for consumers buying qualifying electric vehicles, “will only help Tesla.”
“Take away the subsidies,” Musk wrote in a post on X, the social media platform he purchased and rebranded, last week. “It will only help Tesla. Also, remove subsidies from all industries!”
Wedbush Securities analyst Dan Ives largely agreed with Musk’s assessment, suggesting a second Trump term and the potential loss of the EV tax credit would hurt the industry as a whole but boost Tesla.
“A Trump presidency would be negative for EVs but positive for Tesla because a tax rebate getting taken away would give Tesla a scale and scope price advantage versus the industry,” Ives said.
“Their production scale is unlike any other EV maker,” he continued. “Where some are trying to make 50,000 or 75,000 cars in a year, Tesla will do roughly 2 million. So, they have a pricing advantage, which if a rebate is taken away, would even the playing field and give a notch to Tesla.”
The billionaire’s recent comments on EV subsidies might also just be his “typical Musk bluster and overconfidence,” said Maxwell Shulman, a research analyst at Beacon Policy Advisors.
However, Shulman acknowledged Tesla might have a comparative advantage if “these supports were to go away.”
“Tesla has a head start,” he said. “It has the most market share. It has been doing this the longest. It has institutional expertise. And perhaps most empirically … analysts still generally say they have a profit margin several thousand dollars higher than other traditional, legacy automakers.”
Musk’s closeness to Trump could also be a welcome departure from the billionaire’s icy relationship with Biden.
The Tesla CEO’s feud with Biden appears to stem from the president’s decision to exclude Musk from several EV-related events at the White House early in his term in favor of automakers who had contracts with the United Auto Workers (UAW) union.
“Musk has an ironclad relationship with Trump,” Ives told The Hill. “In the Biden administration, Musk has been an afterthought.”
Trump, for his part, touted Musk as a “great” and “brilliant guy” at a Michigan rally over the weekend and emphasized that he’s not entirely opposed to EVs.
“I love Elon Musk. Do we love him? I love him,” the former president said. “I’m constantly talking about electric cars, but I don’t mean I’m against, I’m totally for them, but whatever the market says.”
Trump also said in a Fox News interview this week that Musk has never pressured him to change his stance on EVs.
“Here’s the thing with Elon Musk that’s amazing, and I keep waiting … he’s never called me and said, ‘Could you lay off the electric car thing?'” Trump said.
Musk and his other companies could also stand to benefit from a second Trump term, experts noted.
A Trump presidency, especially if accompanied by Republican majorities in the House and Senate, could result in a favorable tax and regulatory environment for the billionaire and his companies.
Republicans are hoping to renew several key provisions of the Tax Cuts and Jobs Act that are set to expire in 2026. For instance, the corporate tax rate was slashed from 35 percent to 21 percent in the tax cuts in Trump’s first term, and some GOP lawmakers are now calling for even deeper cuts.
Under a GOP administration, Musk would also be looking at a “massively scaled down regulatory environment,” Shulman noted.
The billionaire’s companies have often had contentious relationships with the federal government.
The Justice Department is reportedly investigating whether Tesla has misled investors and consumers about the capabilities of its Autopilot and Full Self-Driving systems, and the Equal Employment Opportunity Commission sued the EV company last September for racial harassment and retaliation.
The National Labor Relations Board (NLRB) filed a complaint against SpaceX in January accusing the company of unlawfully firing several employees who criticized Musk. The spacecraft and satellite communications company responded by suing the NLRB and challenging the agency’s structure.
Musk has also fought several legal battles with the Securities Exchange Commission, including over his purchase of stock in Twitter, now X, and his comments on the platform about Tesla.
“While I can’t put myself in the mind of somebody else, particularly in the mind of Elon Musk, you could see why he might be making a bet about what kind of presidential administration on the whole, given the entire portfolio of his interests, is going to be more favorable,” said Scott Ganz, an associate teaching professor at Georgetown University’s McDonough School of Business.
As prominent tech figures like Musk increasingly throw their weight behind Trump, Ganz suggested they may be hoping to influence regulatory policy.
“It seems plausible that the sort of recent support of former President Trump by prominent figures in Silicon Valley and the tech community, by Elon Musk, indicates a hope that they can be influential on the direction of regulatory policy, particularly towards tech, in a future Trump administration that they would not have in a Harris administration,” he said.
“I think that we’re seeing a greater appreciation across the tech community of the need to be influential in federal policymaking,” Ganz added.
Musk is one of the latest wealthy tech entrepreneurs to come out in support of the former president. He and several other former Democratic donors have switched sides to back Trump this election, joining a small, existing contingent of conservatives in Silicon Valley.
A newly formed pro-Trump super PAC called America PAC has raked in millions of dollars from this cohort, including Palantir co-founder Joe Lonsdale, Sequoia Capital partners Doug Leone and Shaun Maguire, Valor Equity Partners CEO Antonio Gracias, and crypto investors Cameron and Tyler Winklevoss.
Musk has also said he plans to donate to the super PAC, though not the $45 million per month initially reported.
“I am making some donations to America PAC, but at a much lower level and the key values of the PAC are supporting a meritocracy & individual freedom,” he wrote on X. “Republicans are mostly, but not entirely, on the side of merit & freedom.”