Musk's political gamble: Tesla and Trump boost profits

On Wednesday, 7th November, the day the media reported Trump's win in the U.S. presidential election, shares of Tesla, founded by Musk, soared by approximately 15 per cent. According to CNBC, just hours after Trump’s victory, this single Musk business grew by about £11.6 billion.

CNN calculated that, considering the businessman's investments in Trump's campaign, this gives a return on investment of 12,761 per cent. Meanwhile, over the last 12 months, Tesla's stock value increased by only 1 per cent.

Since Elon Musk began supporting Trump by investing a total of £100 million in the Republican’s campaign, he increased the total value of his assets by £15.5 billion.

Let's remember that Musk is also behind SpaceX, a company operating in the space industry, which he founded in 2002. According to CNBC, since 2008, the company has received over £15 billion from contracts with the U.S. government. According to the president of FedScout, Geoff Orazem, SpaceX is on a solid path to earning several billion pounds annually from major contracts with the federal government in the coming years. CNBC notes that this amount does not include so-called secret expenditures and agreements concerning Starlink terminals.

"We have to protect our geniuses. We have a new star," said Donald Trump, mentioning Musk just after he surpassed 270 electoral votes, securing victory in the presidential elections. On 7th November, Reuters, citing six sources from the billionaire’s companies and two U.S. government officials, reported that Musk's plan is broad, including, after Trump's victory, protecting his companies from regulations and securing access to government subsidies.

Musk also has other expectations from Trump's future administration. As reported by The New York Times, the billionaire turned to Trump to employ selected SpaceX employees in the government, including "a retired Air Force general and a government-affairs executive — as possible hires."

The newspaper reported this information, citing two people familiar with the details of the arrangements. It argues that in this way, Musk wants to fill Trump’s administration with his closest confidants, even though someone with billion-pound contracts with the government should not have influence over that government.

The New York Times also reminds us that Trump himself changed his view on electric cars, which he emphasised in August, shortly after Musk supported him. And that’s not all. Political allies in Congress and the Federal Communications Commission have already questioned the commission’s decision to revoke SpaceX’s £662 million subsidy for providing broadband access in rural parts of the United States.

Elon Musk believes that all regulations hinder his businesses and innovations, a former high-ranking SpaceX representative told Reuters, who wanted to remain anonymous. He added that following the change in the White House, The Trump administration will be a tool to get rid of as many unfavourable regulations as possible, so he can do what he wants and as quickly as he wants.

In 2002, after selling the company PayPal to eBay for £1.2 billion, Musk invested the entire amount in developing new ventures. He focused on SpaceX, intended to be a cheaper alternative to NASA, and on Tesla, an electric car manufacturer. His latest big business move was acquiring the social platform Twitter in October 2022, now operating under the name X.

Known for investments in the artificial intelligence sector, Musk founded xAI in 2023 but at the same time expresses serious concerns about the development of AI. In his opinion, it is one of the main threats to the world, alongside the declining birth rate. According to the BBC, Musk is the father of 12 children. Six of them are with his first wife, three with Canadian singer Claire Boucher, known as Grimes, and another three with his current partner, Shivon Zilis, a Canadian executive in the technology industry.