Elon Musk, the executive behind the automotive and clean energy company Tesla and rocket manufacturer Space X, has made his views about the 2024 election clear.
Musk has endorsed former President Donald Trump and made a significant effort to get the Republican candidate elected. Trump even told Fox News that he’d like to make Musk his new “Secretary of Cost-cutting” although the tech billionaire would not have a role within the Cabinet.
But after investing more than $100 million in the Trump campaign, how will Musk’s businesses be impacted if his plans go awry and Trump does not end up back in the Oval Office?
“In the short term, emotions and momentum can drive stock movements, though they often have limited long-term impact,” Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek. “A Trump loss might lead to a dip in Musk’s stocks, but it’s unlikely to affect Tesla and SpaceX’s longer-term outlook.”
Newsweek contacted Musk and the Trump campaign via email on Tuesday for comment.
If Trump wins, Musk would likely have more business power under Trump’s administration, and investors could act accordingly and stock value for Tesla and Space X would probably rise.
“In the short term, the election results could have immediate implications for both Tesla and SpaceX,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
“A Trump victory is not going to just equate to Elon Musk having strong ties to the White House, but also the ability to influence policy proposals that will undoubtedly favor his companies and their missions. Investors will recognize this, and the bump shares could see could be significant.”
And if Trump is elected and Musk finds himself in charge of economic policies under a Trump administration, there could be major shifts to the federal budget.
Musk previously said he planned to cut $2 trillion from the federal budget if appointed as an adviser by Trump.
For Musk’s business stocks, a Trump victory could lead to an initial surge, but Thompson said it would be unlikely to impact the companies in the long term.
“Trump’s policies generally favor traditional energy sources over electrification, which doesn’t align with Musk’s vision,” Thompson said. “Regardless of the outcome, we’re likely to see some volatility, as traders shift positions and adjust to new economic policies.”
Generally, a Democrat in the White House has positives for electric vehicle companies, Beene added.
Previously, SpaceX gained at least $15.4 billion in government contracts over a decade, including one classified contract for $1.8 billion in 2021, according to The New York Times, and Tesla saw somewhere around $350,000 from government contracts.
“A Trump loss would call into question how beneficial [a Kamala] Harris administration would be for Musk’s businesses,” Beene said. “Historically, Democratic leadership at the state and national levels have favored incentives for electric vehicles, but Musk’s decision to align with Trump could make them reconsider their prior decisions.”
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