Already Funded By Govt., Musk’s Clout With Trump Could Enrich Him Further

Photo: Reuters/Brian Snyder

WASHINGTON, DC (Reuters) – Elon Musk’s backing of Donald Trump’s decisive victory for a second presidency puts the billionaire entrepreneur in an extraordinary position of influence to help his companies secure favorable government treatment.

Musk contributed at least $119 million to a pro-Trump spending group, federal records show, part of a wider strategy to insulate his companies from regulation or enforcement and boost their government support, according to Reuters interviews with six Musk-company sources familiar with his political and business dealings and two government officials who have extensive interactions with Musk firms. Musk has business interests that depend heavily on government regulation, subsidies or policy, from Tesla’s electric cars to Neuralink’s brain chips to SpaceX’s rockets.

“Elon Musk sees all regulations as getting in the way of his businesses and innovation,” said one former top SpaceX official who spoke on condition of anonymity. “He sees the Trump administration as the vehicle for getting rid of as many regulations as he can, so he can do whatever he wants, as fast as he wants.”

Musk was a frequent speaker for Trump during the waning days of his campaign and spent election night with the president-elect at his Mar-a-Lago club in Florida. Trump has also promised to make Musk an “efficiency czar” in his administration.

Musk once fashioned his image primarily around fighting climate change by building electric cars to limit pollution and rockets that could one day help humans flee to Mars from a dying earth. He’s now at the forefront of a growing class of Silicon Valley billionaires championing a libertarian movement as a backlash to the California region’s historically liberal ideology – which Musk now derides as a “woke mind virus.”

His rising political involvement could put his industrial empire in a position that current and former employees likened to the Gilded Age, when industry barons including J.P. Morgan and John D. Rockefeller held broad sway over government policy that impacted their companies and their wealth.

EV Contradiction

The fortunes of Tesla could rise or fall depending on a second Trump administration’s treatment of the diverse array of subsidies, policies and regulatory schemes governing electric and autonomous vehicles. Democratic administrations have historically championed many such pro-EV policies, with Tesla’s support. Musk could potentially now protect them despite the Republican party’s traditional rejection of EVs – and Trump’s ridicule of Biden’s EV policy on the campaign trail.

For Tesla, Musk’s goals include getting the U.S. National Highway Traffic Safety Administration, its primary federal safety regulator, to hold off on potential enforcement actions involving the safety of Tesla’s current driver-assistance systems, called “Autopilot” and “Full Self-Driving,” according to a person familiar with the matter. Musk, the person said, could also push for favorable regulation of autonomous vehicles and robotaxis that Tesla plans. For his new artificial intelligence startup xAI, Musk could shape nascent rules or a new agency, the person said.

There are no nationwide regulations governing how autonomous vehicles can be deployed. That means operators must deal with different regulations in each state.

Musk bemoaned the challenges of the state-by-state regulatory landscape in a Tesla earnings call last month and advocated for one federal approval process.

Space X Takes Govt.Money

Despite Musk’s complaints of stifling bureaucracy, SpaceX currently leads the world in government-financed rocket launches and Tesla sells nearly two million heavily subsidized EVs annually.

Tesla shares were up 15% on November 6 after Trump’s election to a second term.

At his brain-implant startup Neuralink, Musk has long complained that the slow FDA approval process has slowed the firm from implanting the device inside human brains. Musk could use his rising clout in a Trump administration to cut through some of the safety-related approvals in that process, according to a source familiar with the company’s operations.

Musk’s designs on setting up a lax regulatory environment come as his companies already face fewer regulatory requirements and softer enforcement of current federal rules, according to the six Musk company sources familiar with Musk’s regulatory dealings and his political strategy. Some federal agencies already struggle to muster the political will to go after Musk companies for alleged policy violations or safety issues, they said, in part because Musk is the dominant player in highly regulated and politicized industries such as electric cars and rockets.

NASA, for instance, has relied on SpaceX’s know-how in such missions as the expected rescue of Boeing’s Starliner astronauts who are still stranded in space.

NASA and other agencies often try to avoid alienating the company, said a federal official who is familiar with the company’s government interactions and spoke on condition of anonymity. “NASA needs SpaceX more than SpaceX needs NASA,” the official said.

NASA has invested more than $15 billion into SpaceX. SpaceX is also separately developing a network of hundreds of spy satellites with a U.S. intelligence agency, Reuters has reported.

A Reuters investigation last year documented at least 600 worker injuries at SpaceX facilities nationwide and found that Musk’s rocket company disregarded safety regulations and standard practices. Worker injury rates at SpaceX facilities also continued to exceed the industry average last year, according to a Reuters review of safety data.

Neither NASA nor OSHA, which regulates worker safety, has taken any significant enforcement action against SpaceX over worker injuries and related reporting violations. NASA declined to comment on Musk’s potential influence after Trump’s election.

Musk has nonetheless excoriated the government for trying to enforce the rules even as his company has moved faster than competitors. In an interview before the election, he described federal enforcement as overly harsh and said he aimed to get rid of “insane” regulations.

“Eventually, you just can’t get anything done,” said Musk during an appearance at the All-in Summit, a gathering affiliated with a tech podcast by the same name.

However, the U.S. government does not regulate the safety of participants in private space flights in orbit due to a temporary Congressionally imposed ban on the agency’s oversight, to encourage innovation in the industry. A Trump administration, influenced by Musk, is expected to push for softer regulations on this front, according to four SpaceX sources familiar with its regulatory strategy.

Musk and SpaceX see the company’s dominance as evidence that it can handle less oversight, the sources said, even as an unfettered Musk could have unintended consequences for the industry.

One former SpaceX official cautioned that taking a lax regulatory attitude in an industry as dangerous as rocket-building “could blow up in everyone’s face and set back the industry for a decade.