Elon Musk creates a must-win election
The author is a Reuters Breakingviews columnist. The opinions expressed are his own.
By Gabriel Rubin
WASHINGTON, Oct 25 (Reuters Breakingviews) -Biting the hand that feeds you typically makes for a poor business strategy, but perhaps Elon Musk just has a stronger risk tolerance. Despite his core businesses in electric vehicles, batteries, solar panels, and space exploration benefiting significantly from Biden administration policies and investments, the billionaire has made the election a must-win for himself and his expanding global ambitions. A win for Donald Trump would likely give Musk immense power behind the throne to steer U.S. policy, including to the benefit of his companies. But a Kamala Harris win would jeopardize Musk’s lucrative government contracts, especially if he is seen as a threat to national security, an argument that’s easier for Democrats to make following a Wall Street Journal report that Musk has been in contact with Russian President Vladimir Putin.
By zealously campaigning for Trump, Musk can appear as an outsider eager to gain a foothold in American politics, like other companies that seek to gain influence. But Musk’s SpaceX has a $1.8 billion contract with NASA. His battery and solar businesses rely heavily on tax credits pushed by Biden and supported primarily by Democrats. And Tesla’s TSLA.O electric car business has been boosted by the $7,500 consumer tax credit that Republicans have made a top target for elimination. On paper, it seems that Musk has more to lose from a Trump presidency than what he stands to gain.
But by vehemently supporting Trump, Musk could make up for the potential policy losses by serving as the power behind the throne. Musk said during Tesla’s third-quarter earnings call that he would use a hypothetical post at the head of a “Department of Government Efficiency” to push Trump on granting regulatory approval for self-driving vehicles — essentially trading in an above-board government contract for a backroom deal. Trump might also afford Musk a freer hand when it comes to developing artificial intelligence products, which Democrats have shown more of an eagerness to regulate.
A report that Musk has been in frequent contact with Putin since 2022 darkens the picture. Musk’s Starlink satellite internet plays a crucial role in the war in Ukraine, and Musk reportedly has high-level security clearance as a top national security contractor. While Musk’s businesses already faced significant regulatory scrutiny, future Democratic administrations will have to consider whether relying on his companies’ services presents an unacceptable risk. His use of social media platform X to promote election disinformation makes it a target for regulation. Though his renewable energy businesses would likely continue to succeed, the broad expanse of his growing empire is at stake. He has created a must-win situation for himself, even as Democrats have been offering better terms all along.
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CONTEXT NEWS
Elon Musk has been in regular contact with Russian President Vladimir Putin since 2022, the Wall Street Journal reported on Oct. 24. Musk has been a top donor to Republican presidential nominee Donald Trump, with his political action committee spending more than $47 million in the first half of October alone to turn out voters in battleground states, according to federal disclosures released Oct. 24.
The Tesla CEO said during the company’s third quarter earnings call on Oct. 23 that he would push for regulatory approval of self-driving vehicles in a hypothetical government role, which he has discussed with Trump.
Editing by Lauren Silva Laughlin and Pranav Kiran
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