By Marisa Taylor, Rachael Levy and Chris Kirkham

(Reuters) – Elon Musk’s endorsement of Donald Trump’s successful bid for a second presidency grants the billionaire significant power to influence favorable government policies for his companies.

Musk has contributed over $119 million to a pro-Trump spending group and vocally supported the former president during the critical final stages of his campaign. His political engagement reflects a strategic move to shield his businesses from regulation while enhancing government support.

Musk's enterprises, encompassing Tesla, SpaceX, and Neuralink, rely heavily on government oversight, subsidies, and policy. According to a former high-ranking SpaceX official, Musk perceives all regulations as obstacles to his businesses and innovation, seeing the Trump administration as a means to eliminate those obstacles.

Following a Pennsylvania assassination attempt on Trump, Musk officially endorsed him on July 13. His donations helped finance a significant voter turnout push during a challenging phase for Trump's campaign after Vice President Kamala Harris replaced President Biden as the Democratic nominee. On election night, Musk was at Trump’s Mar-a-Lago club, and Trump suggested appointing Musk as his administration's 'efficiency czar.'

Tesla, SpaceX, Neuralink, and Musk did not provide comments, but the Trump campaign praised Musk as a 'once-in-a-generation industry leader,' indicating that federal bureaucracy could benefit from his innovative ideas.

Musk once framed his public persona around combating climate change through electric vehicles and rockets intended for interplanetary travel. However, he now finds himself among Silicon Valley's wealthy entrepreneurs who are aligning with a libertarian movement as a counter-response to California's historically liberal stance, which Musk openly criticizes as a 'woke mind virus.'

This political engagement may echo historical patterns reminiscent of the Gilded Age, where industrial moguls exerted substantial influence on government policy affecting their businesses and wealth.

Musk's growing power is welcomed by supporters who view government as a hindrance to high-tech industries. Shervin Pishevar, a venture capitalist invested in SpaceX, argues that reducing regulation would quicken SpaceX's Mars mission efforts, labeling Musk as America's greatest entrepreneur.

DRIVING AUTO POLICY

Musk's political rise has become more pronounced due to perceived injustices under the Biden administration, driving Musk closer to Trump's right-wing populism. Notably, Tesla was not invited to a significant EV summit at the White House that featured solely unionized Detroit automotive makers.

The future of Tesla may largely depend on how Trump approaches numerous subsidies, policies, and regulations affecting electric and autonomous vehicles. Historically, Democratic administrations have supported many such policies, which Tesla has backed. Musk might work to ensure favorable treatment for electric vehicles, despite Trump's earlier mockery of Biden's EV policies.

For Tesla, Musk's priorities include encouraging the U.S. National Highway Traffic Safety Administration to defer enforcement actions about Tesla’s driver-assistance systems, and he aims to see a relaxation of regulations for autonomous vehicles and robotaxis.

Musk anticipates introducing driverless Teslas in California and Texas by next year and plans to produce a fully autonomous 'Cybercab' devoid of steering wheels or pedals by 2026, pending a waiver from the NHTSA on production.

Currently, varying regulations across states complicate autonomous vehicle deployment. Musk criticized this fragmented approach in a recent Tesla earnings call and now advocates for a single federal approval framework.

Brian Mulberry from Zacks Investment Management, a Tesla investor, believes that a consistent regulatory framework for autonomous driving would significantly enhance Tesla’s standing, advocating for a streamlined federal Department of Transportation to support the company’s assertion of safety.

Despite complaints regarding bureaucracy, SpaceX is currently the leader in government-funded rocket launches, while Tesla sells almost two million heavily subsidized EVs each year.

Musk’s Neuralink faces FDA-related challenges regarding the approval process for human brain implants. As Trump's 'efficiency czar,' Musk might aim to expedite this process by influencing appointments within the agency, according to a source familiar with Neuralink’s operational challenges.

GROWING POWER

Musk’s ambitions for relaxed regulations coincide with his companies currently enjoying relatively minimal oversight and enforcement as reported by sources acquainted with his regulatory strategies. Numerous federal agencies have hesitated to hold Musk’s businesses accountable for alleged regulatory violations, partly due to Musk’s industry dominance in the heavily regulated sectors of electric vehicles and aerospace.

For instance, NASA has depended on SpaceX’s capabilities in various missions, including the anticipated recovery of Boeing's astronauts stranded in space. A federal official noted that NASA tends to avoid actions that could alienate Musk’s companies.

SpaceX has experienced scrutiny regarding safety practices; however, NASA and the Occupational Safety and Health Administration have yet to enact significant enforcement action over reported worker injuries and safety regulation violations. Musk previously voiced dissatisfaction with government enforcement, portraying it as an obstacle to innovation.

While private spaceflight oversight is temporarily restricted, a Trump administration influenced by Musk could advocate for less stringent regulations in this sector. Musk perceives SpaceX’s industry leadership as justification for decreased oversight, although some experts caution that diminished regulatory standards could lead to severe consequences for safety and progress in the sector.