How Elon Musk’s worst business decision led to Donald Trump

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This will add another responsibility to the growing to-do list for an increasingly distracted CEO and business leader.

Musk, CEO of Tesla and SpaceX, owner of X and CEO of other ventures including Neuralink, xAI and the Boring Company, is already busy.

Tesla and SpaceX CEO Elon Musk, left, and Donald Trump campaign at Butler Farm
Tesla and SpaceX CEO Elon Musk, left, and Donald Trump at a campaign event at the Butler Farm Show, Saturday, Oct. 5, 2024. (AP)

Even if Trump’s job is just a side hustle (the post said it was some kind of advisory duty), Musk has one more thing to do than run the world’s most valuable auto company.

But here’s the thing: Musk’s recent distractions may not ultimately matter to his (many) businesses. And in fact there are strong arguments that it pays off for investors.

Tesla, Musk’s most valuable company, has struggled in recent years to maintain dominance in the electric vehicle market.

Sales have slowed as Tesla faces increased competition at the high and low end of the market, and Tesla was recently overtaken by Chinese rival BYD in electric vehicle sales.

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Tesla, meanwhile, has faced a number of federal investigations into its self-driving technology, and the company’s long-promised announcement of its autonomous “Cybercab” last month included a number of promises that sounded like nonsense — even coming. from the notoriously overpromising Musk.

But for Tesla investors, that’s all been in the rearview mirror for the past week.

Tesla ( TSLA ) shares are up 31 percent since Election Day, as investors believe Musk’s influence in the Trump administration will usher in an era of deregulation — particularly in key industries and technologies that could benefit the company.

“The benefits of Musk’s involvement in the Trump administration outweigh the negatives,” said Dan Ives, an analyst at Wedbush Securities.

FILE - Tesla and SpaceX CEO Elon Musk listens as Republican presidential candidate former President Donald Trump speaks at a campaign event at the Butler Farm Show, Oct. 5, 2024, in Butler, Pa. (AP Photo/Alex Brandon, File)
Tesla and SpaceX CEO Elon Musk listens as Republican presidential candidate former President Donald Trump speaks on the campaign trail at the Butler Farm Show, Oct. 5, 2024, in Butler, Pa. (AP Photo/Alex Brandon, File) (AP)

“Tesla investors want more involvement from Musk in the Trump White House – not less – because of his influence on advancing artificial intelligence, Chinese tariffs and rapid autonomous driving regulations.”

Musk, Tesla’s largest single shareholder, has personally reaped the rewards of the stock’s rise. He is $55 billion ($85 billion) richer today than he was on election day, Bloomberg Billionaires Index.

Trump has expressed his disdain for electric vehicles, but that ultimately may not matter so much to Tesla — in fact, eliminating the tax breaks may help Tesla by reducing competition that relies more on them to drive sales demand.

Also, multiple federal investigations into Tesla’s self-driving technology could disappear, Ives said.

Elon Musk takes the stage as Republican presidential candidate, former President Donald Trump addresses a campaign rally in Butler, Pennsylvania on October 5. (Anna Moneymaker/Getty Images via CNN Newsource)

Meanwhile, SpaceX continues to keep pace (and entire astronauts) with the competition, and the era of deregulation under Trump could similarly help the company.

SpaceX’s valuation reportedly topped a staggering US$200 billion ($308 billion) earlier this year, according to Bloombergand after Boeing crashed its Starliner, SpaceX had to rescue astronauts stranded by its crippled rival. And the company is now using “sticks” to catch rocket boosters from the air.

By contrast, X has clearly struggled under Musk — losing 80 percent of its value, according to Fidelity, as advertisers flee the social network that has become a free-for-all for hate speech and conspiracy theories.

But that’s not because Musk has been distracted—if anything, attending X has become Musk’s primary focus, with constant posts supporting his increasingly right-wing views.

Republican presidential candidate former President Donald Trump hugs Elon Musk at a campaign rally at the Butler Farm Show, Saturday, Oct. 5, 2024, in Butler, Pa.
Republican presidential candidate former President Donald Trump hugs Elon Musk at a campaign rally at the Butler Farm Show, Saturday, Oct. 5, 2024, in Butler, Pa. (AP Photo/Evan Vucci)

But ironically, Musk’s controversial – and expensive – $US44 billion ($68 billion) purchase of then-Twitter (now X) in 2022 started his descent down the MAGA rabbit hole – and a rise in Trumpworld that propelled him to a role in what’s next the president’s ear.

And that gave Tesla a valuation north of $US1 trillion ($1.5 trillion). It is one of only nine publicly traded companies with 13-figure valuations.

Ives called Musk’s journey a “Twilight Zone puzzle.”

“It’s a ride that feels like it’s just getting started,” Ives noted.

Of course, if Trump and Musk remain on good terms.

Trump has a long list of former allies who have fallen out of favor for one reason or another. And no matter how much power and influence Musk can provide, Trump will have the biggest trump card: He will be president.

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