Published in Svenska Dagbladet, 2024-11-06. Translated from Swedish.
The world’s richest man played an extraordinarily high-stakes political game. Elon Musk bet everything on red — and won. Now comes the payoff.
They were not always close friends, the two most talked-about billionaires in America. In the summer of 2022, Donald Trump’s re-election campaign was already under way, and from a podium he described Elon Musk as a “bullshit artist.” But a lot can happen in two years. Musk has rapidly become Trump’s most powerful ally. Now the payoff is coming.
Elon Musk is an entrepreneur whose many businesses are deeply intertwined with the American state. Tesla earned over 18 billion kronor in 2023 from a state-regulated electric vehicle tax credit. SpaceX has in practice functioned as a privatised arm of NASA. Add the regulatory approvals needed by brain-implant company Neuralink, and the political reach of the platform X. The picture is complex, but the common thread is that all are profit-driven companies that have made Musk enormously wealthy while operating in the grey zone between the public and private sectors — sometimes through subsidies, sometimes through regulation, sometimes through its absence.
Having a political leader who is well-disposed toward you and your businesses is therefore extremely valuable for Musk. But he has clearly managed to succeed without Trump’s help until now. To understand Musk’s newly found and very vocal political engagement, we need to look forward instead. What is on the agenda for his business empire?
Start with Tesla, which accounts for the single largest part of Musk’s wealth. In the late 2000s Tesla were pioneers in the electric vehicle category — a small niche at the time. After questions about whether that kind of car production could ever be economically viable, Musk launched several new models that were well received by the market. The small player became dominant and effectively forced the rest of the car industry onto the same track. Today electric vehicles are no exotic category — everyone makes them. Tesla remains a large and important player, but its dominance has faded. More importantly, the niche is no longer unique. To justify a higher stock market valuation than other car manufacturers, the company must talk about something else. Why else would Tesla carry a P/E ratio of 63 while General Motors trades at around 5? Tesla’s answer is self-driving cars and AI. Musk himself has said the company should be seen as an AI and robotics company. But after selling a “self-driving” add-on to Tesla cars for many years, full autopilot has yet to be released — partly because it is not ready, and partly because Tesla lacks regulatory approval. Self-driving cars do exist on American roads, but only from a handful of companies in a couple of specific areas. Tesla is entirely dependent on how regulations are shaped. Having the president’s ear in that situation is very convenient.
Next is SpaceX. Even with breakthroughs like catching and potentially reusing rocket boosters, enormous resources are required to keep the operation running. Exploring Mars — one of Musk’s stated goals — has no commercial basis at present. Musk wants to run the programme, but the American state needs to foot the bill.
Finally, X. The social network has lost enormous numbers of advertisers since Musk took over, but its power position remains strong. During the election campaign it was mobilised to present an alternative worldview to what was available in mainstream media. Accurate? Sometimes. But its role as a hub for a Republican media machine was cemented. Interest in X will increase with Trump as president.
It is possible that the former Democrat Elon Musk has simply grown tired of the establishment. He has expressed a desire to cut unnecessary bureaucracy through a special assignment for Trump — DOGE, the Department of Government Efficiency. The idea that the state is inefficient is hardly a unique insight; it is a well-worn argument from the political right. Being at the centre of such a process would be a new kind of feather in Musk’s cap. Whatever his actual political views, Musk had many billions of reasons to support a Republican election victory. He played a high-stakes game and managed to enrage the Democrats enormously. A defeat would have been devastating for him and for the companies he is involved in. The billionaire won again. And his power has never been greater.
