Musk’s main focus will probably be on loosening regulations for autonomous driving software, which he considers crucial for Tesla’s success. This might involve urging the National Highway Traffic Safety Administration to scale back its rigorous examination of Tesla’s technology. The agency is currently investigating whether Tesla’s “full self-driving (supervised)” system caused four crashes, one of which resulted in a pedestrian’s death.
Elon Musk has made a substantial bet by fully supporting Donald Trump’s presidential campaign, contributing millions of dollars and spearheading a voter mobilization effort. This move has now positioned him advantageously, providing him with a direct channel to the White House, which he might leverage to influence policy to the benefit of his electric car company, Tesla. In response to this development, Tesla’s stock surged by nearly 15% on Wednesday.
The extent to which Musk will use this newfound political influence for Tesla, as opposed to his other ventures like SpaceX and xAI, remains uncertain. However, the market’s reaction suggests a strong belief that Trump’s administration could favour Tesla, despite the president-elect’s previous criticism of electric vehicles and renewable energy.
One of Musk’s likely objectives is to soften regulations on self-driving technology, which he sees as crucial for Tesla’s future. This could mean less stringent oversight from the National Highway Traffic Safety Administration, which is currently investigating Tesla’s self-driving software linked to several accidents.
Furthermore, Musk could benefit from Republican-led efforts to establish a national standard for self-driving cars, which would replace the disparate state regulations—a longstanding ambition of Tesla and similar companies. Such moves would be in line with Trump’s suggestion to appoint Musk to lead a government efficiency commission.
However, potential conflicts loom over differing policies, especially regarding Trump’s intent to scrap tax credits for electric vehicle purchases and subsidies for domestic car and battery manufacturing. While these cuts could disproportionately affect other carmakers, they would also impact Tesla, which has profited significantly from selling clean air credits.
Moreover, Musk faces potential challenges from a possible trade war with China, a key market for Tesla, which also operates a significant factory in Shanghai. Despite these concerns, some analysts believe Tesla’s strategic manufacturing locations in Texas and California may mitigate the risks associated with restrictive tariffs.
