Elon Musk, the world’s wealthiest tech mogul and one of Donald Trump’s most visible and avid endorsers, has just been appointed by the president-elect to head the new Department of Government Efficiency (DOGE). Musk was appointed in early September, along with previous Republican presidential candidate Vivek Ramaswamy.
From investing $119 million into a Super Political Action Committee (PAC) aimed to re-elect Trump, to jumping onstage with the utmost enthusiasm beside the candidate in a high-stakes Pennsylvania rally, Musk truly devoted time and effort into Trump’s campaign in the weeks leading up to the election. While Trump was watching the election results from his Mar-a-Lago estate, Musk, sitting a few feet away, was basking in a victory for which he had been a critical factor.
The Tesla and SpaceX CEO had been undecided up until May of this year, but he threw himself behind Trump immediately after the attempted assassination in Pennsylvania, when he publicly announced his full endorsement of the candidate. However, this was not a surprise, as he has used the social media platform X (formerly Twitter) to support the Republican Party and push Democrats out of the spotlight since he bought it in October 2022.
Musk’s backing of Trump was highly strategic, as he could benefit from many of Trump’s policies. Some of these have already taken place, such as his appointment to the DOGE.
As early as the Wednesday after Election Day, investors were betting that Trump’s win would benefit Musk’s major electric vehicle public holding, Tesla (TSLA). Shares were immediately driven up 13% at the market’s opening, increasing Musk’s wealth by $20 billion that day alone. This marked a two-year high for the company, which had struggled for most of 2024 and was only up 1% for the year up until the end of Election Day. Over the past month, however, Tesla shares have increased more than 50%.
President Joe Biden’s administration has provided significant federal support for electric vehicles, contrary to Trump, who has previously expressed distaste for such vehicles and mentioned removing their current tax credit. Nonetheless, the president-elect has purposely remained ambiguous with his stance on electric vehicles. Just a few months ago, he openly stated that he was for electric cars purely because of Musk’s support for him.
Trump has also been clear throughout his campaign that he intends to increase tariffs on imports from China. Since many of the materials needed to make Tesla cars and SpaceX rockets come from China, Musk would suffer significantly from the consequences of this new foreign policy.
However, Trump may still be more likely to ease regulations for Musk’s new self-driving Cybercab vehicle than the Democrats. During Biden’s presidency, the company’s current driver-assist features, known as Autopilot and Full Self-Driving, were facing probes from federal safety regulators after a series of technology crashes. Recently, however, there have been 20 federal investigations surrounding Musk’s companies, including one that targets a self-driving car technology that Tesla considers important for its future.
Musk had also requested Trump to hire some employees from SpaceX as high-ranking government officials, including those in the Defense Department. If the request is approved, SpaceX could have employees in the very government agency that acts as one of their biggest customers.
There is no doubt that Musk is deeply entangled with the federal government. His companies make billions of dollars on contracts with government agencies, such as the Defense Department and NASA, to launch rockets, build satellites and other space-communication services. Additionally, Tesla makes hundreds of millions from emissions-trading credits created by federal law.
The DOGE, in Trump’s words, aims to “drive large-scale structural reform” while partnering with government agencies. Musk himself has mentioned cutting $2 trillion or more from the federal budget, which would weaken his greatest obstacle toward asserting even more power over the federal government.
The initial assumption when Trump appointed Musk to a “government efficiency commission” was that Musk may gain power in overseeing those whose jobs were to regulate him and his companies. Musk certainly will have the ear of the president going forward, but the DOGE is not currently considered a real government agency, and there is uncertainty as to how much it can influence these investigations.
Trump’s decision to put Musk in a political position directly after his reelection was not unexpected. However, this particular position, with an undefined amount of power, leaves much of Musk and Tesla’s future unclear, as well as the nature of Musk and Trump’s partnership moving forward.
By Sophia Li and Eileen Maloney Cunningham
