by Nathan Gomes and Zaheer Kachwala
(Reuters) – Tesla boss Elon Musk stands to benefit greatly from his ties to newly elected US President Donald Trump, whom he actively supported during the election campaign.
The billionaire, who donated millions of dollars to Donald Trump’s campaign, could be appointed by him to head a commission on government efficiency to reduce federal spending.
Elon Musk’s influence should thus be significant, while his privileged relationship with the Department of Defense, linked to the development of the Starlink satellite system of his company SpaceX, already gives him considerable power.
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Regarding electric vehicles, Tesla’s main activity, Donald Trump, who likes to speak of a “scam”, could backtrack on the outgoing administration’s objective of bringing EV to 50% of vehicle sales new in 2030. A measure that could harm competitors more than Elon Musk’s company.
“No one makes money from EVs besides Tesla, so reducing or eliminating EV credits will widen Tesla’s competitive moat,” says Garrett Nelson, vice president and equity analyst at CFRA Research.
After Donald Trump’s victory on Wednesday, Tesla’s stock jumped 12%.
Shares of other EV makers such as Lucid Group and Rivian Automotive fell 2.9% and 7.8%, respectively.
In addition, Donald Trump’s promises to apply high customs duties on Chinese imports, including on EVs, would protect Tesla from this competition, according to analysts.
Chinese electric vehicle manufacturer BYD saw its stock fall 2.3% overnight.
If Elon Musk’s management of conflicts of interest in the automotive, space, health, construction and artificial intelligence sectors remains unclear, a place in the Trump administration would give him ” an influence on American policy” in these areas, according to Mamta Valechha, consumer analyst at Quilter Cheviot.
Elon Musk could thus try to use his influence to reduce regulatory oversight of his companies. He has in the past criticized federal review of his rocket company SpaceX and wants to speed up approval of its autonomous driving technology.
Also a big supporter of carbon-free energy, Tesla being a major supplier of solar systems and batteries, Elon Musk opposes Donald Trump on this subject.
The Republican has pledged to end the offshore wind industry and cancel any unspent related funds under outgoing President Joe Biden’s Inflation Reduction Act.
(Reporting Nathan Gomes and Zaheer Kachwala in Bangalore; Etienne Breban; editing by Sophie Louet)
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