Whereas Musk’s personal sector successes are plain, the federal government isn’t a enterprise. Streamlining a federal finances within the trillions of {dollars} is extra nuanced than mass firings and comes with robust selections about how public providers are allotted. A lot of what DOGE has achieved in its quick life to this point is performative, albeit headline-grabbing and deeply disruptive. Furthermore, certainly one of Musk’s most distinguished failures up to now couple of years concerned Tesla touting, after which not delivering, a low-price electrical automobile.
The surge in worth of Musk’s varied companies since Election Day exhibits buyers consider he stands to achieve financially. Musk’s estimated internet value approached half a trillion {dollars} in mid-December, in keeping with knowledge compiled by Bloomberg. The worth of his largest and most liquid asset, a 12.8% stake in Tesla, nearly doubled within the six weeks after the election, taking the corporate’s market capitalization to greater than $1.5 trillion. In the meantime, intently held House Exploration Applied sciences Corp., generally known as SpaceX, was revalued 67% larger in an equity-raising spherical in December, making it the world’s most-valuable tech startup. Even X Holdings Corp. is reportedly in talks to boost new cash at a valuation matching the $44 billion Musk paid for the sputtering social media firm just a few years in the past, a outstanding turnaround that displays the spur to advertisers that has come from its proprietor’s ties to authorities in addition to a stake in synthetic intelligence enterprise xAI.
The advantages to Musk are, nevertheless, unfold inconsistently throughout his empire and include dangers. Tesla’s inventory has given up greater than 80% of its Trump bump as buyers consider whether or not his preoccupation with DOGE advantages the corporate sooner than it corrodes the model and offsets current weaknesses. Gross sales plunged 45% final month throughout Europe at the same time as rival EV makers skilled a lift in demand. Though SpaceX seems to be to be in an enviable place, Trump’s patronage is hardly indubitable. And Musk’s demonization of Democrats might depart the rocket developer uncovered when energy shifts once more in Washington. Additionally, the extra distinguished Musk turns into, the extra seemingly that questions on conflicts shall be requested, main extra People to marvel in regards to the knowledge of 1 man controlling so many corporations with vital applied sciences spanning media, transportation and communications intertwined with authorities, some with nationwide safety implications.
The three most evident potential advantages to Tesla from Musk’s function in authorities concern regulation, entry to overseas markets and federal procurement. All look nebulous in contrast with the actual issues circling the corporate. Trump’s deregulatory agenda, amplified by DOGE’s mass firings, portends a hollowing out, and doubtlessly cowing, of presidency our bodies accountable for scrutinizing Tesla. These embrace the Nationwide Freeway Visitors Security Administration, the Nationwide Labor Relations Board, the Securities and Change Fee and the Division of Justice. A lighter contact on Tesla’s autonomous automobile ambitions plus, maybe, supportive federal laws round self-driving autos are significantly intriguing prospects for buyers. There may be much less right here than meets the attention. Tesla’s massive downside isn’t overbearing regulators; it’s an undercooked product. Musk has been advertising and marketing a robotaxis-everywhere imaginative and prescient for years. That he now touts as a victory the upcoming launch of a geofenced service in only one US metropolis — one thing rival Waymo LLC has accomplished for a while — truly represents a giant climbdown. It additionally isn’t clear that federal robotaxi laws is even wanted to foster deployment, as Waymo’s enlargement exhibits. Furthermore, any try and lighten regulatory oversight might undermine public belief in robotaxis.
Musk’s latest sit down with Prime Minister Narendra Modi of India demonstrated how Musk can use the White Home as his private assembly room with world leaders. Once more, it sounds bullish, however Tesla’s push into India might be topic to progress on a wider US-India commerce deal, with Trump calling the thought of any Tesla manufacturing facility being constructed there “unfair” to the US.
Equally, a murky story a couple of State Division proposal to purchase $400 million value of “armored” Tesla EVs seems to carry out the prospect of federal {dollars} flowing on to Tesla. The plan was apparently rescinded after media scrutiny, however, even when it wasn’t, Tesla would want lots of these to offset its largest, all-too-tangible downside: Faltering EV gross sales worldwide.
Proof is mounting that Musk’s embrace of far-right politics is deterring prospects in key markets corresponding to California and Europe, which collectively accounted for an estimated 30% of Tesla’s EV gross sales in 2024. YouGov carried out polls in Germany and the UK in mid-January that discovered Musk was considered unfavorably and that his meddling within the international locations’ politics was unwelcome, in keeping with Bloomberg Information. Then there’s Trump’s animosity towards EVs, which poses an extra menace, since, as a lot as Musk touts libertarian ideas, Tesla has change into more and more depending on subsidies to spice up flagging revenue margins.
In contrast to with Tesla, SpaceX entered the DOGE period with momentum. Musk has huge leverage over the industrial house trade and NASA as a result of SpaceX, through which he holds a 42% stake, in keeping with knowledge compiled by Bloomberg, developed a rocket-launch system that’s about 90% cheaper than previous options. Additionally, its Starlink satellite tv for pc communications unit has industrial and strategic attraction to governments and people worldwide. Not that Trump’s victory isn’t useful to SpaceX. The potential advantages for such an organization — one that’s regulated by and indicators contracts within the a whole bunch of hundreds of thousands of {dollars} with a federal authorities the place Musk has broad attain — look far clearer than for Tesla.
Trump says Musk gained’t deal instantly with space-related points in his DOGE work. Even when that proves to be the case, affect over budgets and headcount, plus the power to talk on to the president, supply doubtlessly efficient methods to form federal companies. Most related are the Federal Aviation Administration, which regulates something that flies, and NASA, SpaceX’s largest buyer. Musk is pushing the FAA to improve its data expertise networks with Starlink’s satellite tv for pc web terminals, searching for to ship 4,000 of them to the company, and no less than one has already been put in, Bloomberg Information reported. (It’s not clear how this impacts a $2 billion contract awarded in 2023 to Verizon Communications Inc. to enhance the nationwide airspace system. It’s additionally not clear who on the company can be prepared to say “no” to Musk and threat blowback from Trump.)
Then there’s a latest government order the place Trump sought extra management over impartial companies together with the Federal Communications Fee. Starlink depends upon FCC approvals to launch and function its 7,000 low earth-orbit satellites. The Pentagon had been working with SpaceX earlier than Trump took workplace on a militarized model of Starlink’s service known as Starshield.
Musk’s affect additionally issues for SpaceX rivals corresponding to Boeing Co. and Lockheed Martin Co., which have struggled to maintain tempo. Contemplate that Musk simply known as for early retirement of the Worldwide House Station, which represents a big contract for Boeing. As a substitute, Musk would have NASA give attention to his private obsession, and a stretch purpose for SpaceX, of sending astronauts to Mars. The scenario is much more delicate for startups corresponding to Rocket Lab USA Inc., which seeks to emulate SpaceX’s end-to-end satellite tv for pc service by way of partnerships and can depend upon even-handed regulators to pave the way in which for its rocket growth and launches.
SpaceX and Starlink even have nationwide safety and geopolitical dimensions. World leaders searching for to win favor with Trump current a possible boon, even when Musk isn’t instantly concerned. That could be the case in Vietnam, which is planning to alter a legislation that restricts overseas possession of telecommunication providers corporations. The modifications would enable Starlink, which has been in talks with that authorities for years, to deploy its system whereas sustaining full possession.
That’s not almost as direct because the stress, with Trump’s assist, that Musk utilized to South Africa President Cyril Ramaphosa to chill out a legislation aimed toward redressing the racial inequality wrought by apartheid. The legislation would pressure SpaceX in South Africa — Musk’s birthplace — to allocate a 30% shareholding to traditionally deprived teams. Arguing with Ramaphosa on X, Musk labeled the legislation “racist.” Days later, Trump signed an government order decrying a South African legislation on expropriations in addition to the nation’s stance on Israel. In one other slap at Ramaphosa, none of Trump’s cupboard members will attend the Group of 20 assembly that South Africa is internet hosting. Coincidence, maybe, and to this point SpaceX hasn’t gained an exemption from the legislation, as talks have stalled.
What units Musk aside from an extended line of company titans with a style for political energy is his technique. Fairly than the same old hedging of bets given the tendency for energy to shift between the 2 events each few years, Musk’s embrace of Trump and the MAGA motion is, to make use of a popular phrase of his, exhausting core. Musk maybe regards November’s election consequence as representing some form of structural change, with the Democrats he now overtly disdains unable to regain energy. This might be an odd assumption, on condition that Trump gained with lower than half the favored vote and Republicans barely gained management of Congress. It could even be a deeply troubling one, given Trump’s authoritarian impulses, expressed most viscerally in his try and overturn his election defeat in 2020.
It’s potential the world’s richest man, with affect stretching from smartphone screens to house journey and now the White Home, merely regards himself as untouchable. Which will clarify why slightly than simply being a giant donor discreetly searching for the odd favor, Musk has determined to change into an energetic participant in a recreation that might lengthen even past DOGE’s deliberate expiration in July 2026.
Such a gambit brings nice energy but additionally threat to him and his corporations. Just below half of People say they disapprove of the job Musk is doing, in keeping with a Washington Publish-Ipsos ballot. Latest protests at Tesla showrooms additionally attest to a backlash gathering. In China, house to Tesla’s largest EV manufacturing facility, Musk’s function as Trump-whisperer might translate to favor for his operations there or as simply make him a goal for Beijing.
Above all, Musk’s peculiar function as a freewheeling senior adviser to the world’s strongest particular person might make it simpler for Trump accountable him when issues go awry, casting him apart like so many others in Trumpworld after they stop to be helpful. The founding precept of US governance is that energy is neither absolute nor everlasting. That Musk acts as if that isn’t essentially the case is maybe his largest vulnerability. Or ours.
