Speaker 1: Over the last stretch of Donald Trump's candidacy for president, no one was a bigger cheerleader for him than Elon Musk.

Speaker 2: America's just not going to be great. America is going to reach heights that it has never seen before. The future is going to be amazing.

Speaker 1: Aside from stumping for Trump on the campaign trail for weeks, the tech magnate also poured millions into Trump's election campaign. Musk also used his social media company X as a pulpit to promote his preferred candidate, often with claims that were untrue.

Speaker 3: It's still a very powerful platform. It's still the platform many celebrities and politicians and so many people use to make official announcements and talk directly to people. So it is a real hub and source of news. And he basically turned that into Trump's favor.

Speaker 1: The admiration went both ways. Here is Donald Trump praising Musk during his speech declaring victory in the 2024 presidential election.

Speaker 4: We have a new star. A star is born, Elon.

Speaker 1: Trump's imminent presidency is paying off for Musk, who is already the richest man in the world, even before Trump steps into the White House on January 20th. In the week after the election was called for Donald Trump, Tesla stocks surged, with shares of the company reaching their highest level since 2022. The company's market capitalization is now over $1 trillion.

Speaker 5: A lot of analysts are going to look at the Trump presidency as a very positive thing for Tesla because they just see Musk's influence over the incoming administration can streamline things that Tesla wants permission to do.

Speaker 1: With the election of Donald Trump to a second presidential term and the appointment of Elon Musk as a head of a new government efficiency commission known as Doge, CNBC wanted to learn how Musk and his myriad of companies may benefit from having the year of the president. Elon Musk's business empire is sprawling. It includes EV maker Tesla, social media company X, artificial intelligence startup XAI, computer interface company Neuralink, tunneling venture Boring Company and aerospace firm SpaceX. Some of these companies already benefit tremendously from federal contracts.

Speaker 5: SpaceX has already earned more than $19 billion from its prime contracts with the government. Most of that business is coming from contracts with NASA and the Department of Defense, including like Space Force, Air Force and others. Sometimes it's NOAA. But the federal government in the U.S. is very, very reliant on SpaceX to go ahead with its launches, to put new satellites up for their various purposes, be it defense, be it environmental and communications.

Speaker 1: Meanwhile, the U.S. government has been paying SpaceX millions to make its Starlink satellite Internet available in Ukraine. The company is also working on a military version of Starlink called Starshield for the Department of Defense. This vast reliance on SpaceX has caused some of SpaceX's rivals to object. In 2021, Jeff Bezos' Blue Origin sued and eventually lost a case where the company argued that NASA had unfairly chosen SpaceX as the sole winner of a contract to develop a lunar lander for NASA's Artemis missions. NASA has since also contracted with Blue Origin for the task. Still, with a favorable president on his side, it's not hard to imagine Elon Musk's SpaceX winning even more of these lucrative government contracts in the future.

Speaker 5: As the concerns about, you know, a monopolistic relationship grow within that federal government, Trump isn't likely to slow it down. SpaceX is likely to earn out more than $5 billion a year over the next several years from federal contracts they've already kind of got locked down. And that could even grow.

Speaker 1: During his victory speech, Trump marveled at SpaceX's ability to retrieve the rocket booster of its massive Starship rocket and praised Musk for delivering Starlink Wi-Fi terminals to North Carolina following Hurricane Helene.

Speaker 4: It was very dangerous. People would die. They had no communication. All the wires were down. I called Elon Musk. I said, Elon, you have something called Starlink. Is that right? Yes, I do. What the hell is it? He said, it's a communication system that's very good. I said, Elon, they need it really, really badly in North Carolina. Can you get it? He had that there so fast. It was incredible.

Speaker 1: Tesla has also benefited greatly from government support, mostly by taking advantage of existing EV policies like automotive regulatory credits, which are issued to companies that make low-carbon or no-carbon emission vehicles. Regulatory credits made up about 60 percent of Tesla's net income in the second quarter of 2024 and about 39 percent in the third quarter. In total, the company has reported about $10 billion in sales of environmental credits since 2015. While Trump has often promised to dismantle existing green energy subsidies and programs, he may not have the authority to single-handedly dismantle carbon credits, as many carbon credit markets are state-run. In addition, many clean energy projects enjoy bipartisan support.

Speaker 6: 80 percent of the funding from the president's signature bills, the Inflation Reduction Act and the bipartisan infrastructure law, have gone to red districts, districts represented by Republicans. It would be political malpractice to undo those opportunities.

Speaker 1: Where Trump may have more power is nixing electric vehicle tax credits offered to those who purchase EVs and eliminating grants for the buildout of electric vehicle charging, which Tesla has also benefited from. In a post on X in July, Musk was adamant that Tesla doesn't need subsidies and that removing them would only help the company. Some industry insiders agree.

Speaker 7: At the end of the day, Tesla is the best position versus all the automakers, including the legacy automakers on EVs. You know, they have the biggest scale, they have the lowest costs, they have the highest margins to withstand an environment where, let's say, Trump pulls a majority of the incentives.

Speaker 1: Musk and Tesla are now focused on autonomy and bringing robotaxis to market, a goal that still seems years away.

Speaker 5: Tesla's still really grappling with development of that technology. They have never made a vehicle that's safe to drive without a human at the wheel, ready to steer a brake at all times in an uncontrolled environment like the public roads.

Speaker 1: The Trump team is reportedly planning to prioritize federal regulations around self-driving vehicles in the U.S., which would be a boon for Tesla.

Speaker 8: Trump did make it official late last night that Elon Musk and Vivek Ramaswamy will co-lead what he's calling the Department of Government Efficiency. Trump said that their goal will be to, and this is a direct quote here, Now, guys, many questions about how exactly any of that would work, starting with that the president-elect cannot just create a new agency without Congress, which approves all spending. But Trump did say a little bit in his statement announcing it, that Musk and Ramaswamy will work from outside of government in partnership with the Office of Management and Budget. That setup will not require either one of them to divest anything, to pass a background check or to get Senate confirmation.

Speaker 1: Even as an advisor, the position could be a powerful boost to Musk's business interests.

Speaker 5: The number one way Elon Musk and his companies would benefit from a Trump administration is through deregulation and defanging, giving fewer resources to federal agencies tasked with oversight of him and his businesses.

Speaker 1: As head of the Government Efficiency Commission, Musk has said that he plans to shave off a significant amount of dollars from the federal budget.

Speaker 9: We set up DOGE. Yes. How much do you think we can rip out of this wasted $6.5 trillion Harris-Biden budget?

Speaker 2: Well, I think we can do at least $2 trillion. Yeah.

Speaker 1: For context, in 2023, the federal government budget was $6.1 trillion, with the largest chunks of the budget going to entitlement programs, including Social Security, Medicare and Medicaid. On X, Musk suggests that one way to rein in the budget is to get rid of the fraud affecting some government programs. Data from the Government Accountability Office shows that the federal government lost an estimated $233 to $521 billion annually due to fraud between 2018 and 2022. Musk has also suggested that he will consolidate some of the country's over 400 federal agencies.

Speaker 10: I think there's something like 428 federal agencies. That's almost two agencies per year since the founding of the country and more being created. And so I call this like a sort of strangulation by overregulation. And this is crazy.

Speaker 1: In a recent commentary piece in The Wall Street Journal, Musk and Ramaswamy wrote that DOGE will The commentary went on to say that many existing federal regulations were never passed by Congress and should therefore be nullified, which President-elect Trump will be able to do by executive action. Meanwhile, cutting expenditures like the $535 million a year that goes to the Corporation for Public Broadcasting, $1.5 billion for grants to international organizations and nearly $300 million to groups like Planned Parenthood could deliver major cost savings, they said. The two also championed the large-scale auditing of agencies, calling out the Pentagon for failing its seventh consecutive audit.

Speaker 3: Musk here really has the opportunity to suggest to Trump that he makes cuts at federal agencies that could, in effect, directly impact how he does business. That includes the SEC. That includes the FAA and SpaceX launches, kind of cutting the red tape there, making it easier for them to launch without certain regulations and rules, including environmental protections. And then there's a National Highway Transportation Safety Administration. That is a big barrier for Musk's ambitions and robo-taxis.

Speaker 1: The agency has been a strict watchdog when it comes to the safety of Tesla's vehicles.

Speaker 11: This is a major recall Tesla is announcing after an investigation by the National Highway Traffic Safety Administration. Tesla is recalling 362,000 vehicles.

Speaker 12: Tesla shares taking a leg lower late today after the National Highway Traffic Safety Administration found a critical safety gap in its autopilot system.

Speaker 1: Meanwhile, testing standards for autonomous vehicles are done on a state-by-state basis, something Musk has said he would like to be standardized through a federal process and Trump has said he will support.

Speaker 5: Musk has said that he wants to get the DOT to instate a federal motor vehicle safety standard that would allow you basically like a super pass. You know, you just meet this one standard and then you can use your robo-taxis anywhere in the country.

Speaker 13: If Tesla can get a favorable environment around the government talking to the states about making some of these full self-driving more available, that can move the needle. Just to put some quick perspective on it, within a few years, there'll be about 10 million Teslas on the road. Half of them get it that add six billion in their net to their net income. That would increase it by about 35 percent. This is a huge lever.

Speaker 1: Elon Musk has frequently blamed government regulation for stifling innovation.

Speaker 10: A bonfire of nonsense regulations would be epic.

Speaker 1: More lax regulation could also help Musk's newer companies.

Speaker 13: As far as what's going on with X and Twitter, that piece is that there's probably a benefit just around his ability to continue to grow that platform just kind of in a more free speech type of world. And lastly, don't forget about X.AI. I mean, the whole AI piece, this potential around some regulation around AI that diminished today. And I'm stretched to try to find out how this could play out negative for Elon.

Speaker 1: A weakened regulatory body might also bolster Musk's fight against the numerous probes and investigations he and his companies are facing from federal agencies.

Speaker 5: There's somewhere in the ballpark of 19 or 20 federal probes and lawsuits involving Musk and federal agencies. There are OSHA investigations into safety issues of Tesla and SpaceX that are open. There's an EEOC civil rights investigation into Tesla. They believe that Tesla allowed racist discrimination and retaliation against black employees to happen for years. The Labor Board is investigating SpaceX for possible alleged retaliation against employees. He spoke critically of Musk with this open letter. Additionally, the SEC is investigating whether Elon and his brother have committed securities fraud. The EPA found SpaceX was in violation of the Clean Water Act in Texas. And he was livid about that, which delayed the Starship launches that he wanted to go forward with. And then you've got all the Department of Transportation safety probes. There are four open currently looking into mostly safety defects around autopilot, FSD and these partially automated driving systems that Tesla's had out on public roads. He's hoping that Trump will, you know, force those agencies to wind down and abandon any probes, charges, litigation they were pursuing against him, against Tesla, against SpaceX and so forth.

Speaker 1: Finally, Trump is also likely to back Musk's anti-union stance. Here's the president-elect speaking to Musk during the two-hour interview on X in August.

Speaker 14: Well, you, you're the greatest cutter. I mean, I look at what you do, you walk in and you just say, you want to quit? They go on strike. I won't mention the name of the company, but they go on strike and you say, that's OK, you're all gone. You're all gone. So every one of you is gone.

Speaker 3: There was a thought, you know, going into after that big union contract was won with UAW following the strike, that that might trickle over and bleed over into Tesla, that the UAW can convince Tesla workers to do the exact same thing and unionize for the first time. Now that the election has been decided in Trump's favor, a lot of the gas in that argument has been taken out.

Speaker 1: Although Trump and Musk align on a number of strategies, it's unclear where Musk stands on Chinese tariffs, since he's changed his position in the past.

Speaker 15: The Chinese car companies are the most competitive car companies in the world. Frankly, if they're not trade barriers established, they will pretty much demolish most other car companies in the world.

Speaker 10: Tesla competes quite well in the market in China with no tariffs and no differential support. So, in general, I'm in favor of no tariffs.

Speaker 3: He's been very easy to criticize people home and abroad, except China, which is his biggest growth market outside the United States. Tesla's been producing more vehicles there, and he needs the Chinese Communist Party to like him.

Speaker 5: One of Tesla's most productive factories is its Gigafactory in Shanghai, where they make cars and are also planning to make megapacks, these energy storage systems that are for, you know, utilities or large scale operations like businesses. They likely under a Trump administration won't be able to export those to the States.

Speaker 1: While tariffs could help protect Tesla from Chinese competitors, such a move could lead to disruptions to Tesla's automotive supply chain. Though Tesla leads its competitors in the number of domestic parts it uses, the company still relies on some materials and parts from China. And Musk's other companies could also be affected by global tariffs.

Speaker 5: A huge number of the AI chip tech that XCorp and XAI are using right now comes from NVIDIA. And NVIDIA's major manufacturing partner, TSMC, is based in Taiwan.

Speaker 1: It's unclear if Trump's tariffs will apply specifically to TSMC, which is already investing in building out manufacturing plants in the U.S.

Speaker 3: If and when a trade war does break out again, Musk might stay out of it. It would behoove him to continue to stay out of any kind of Chinese related politics. Just like we see at companies like Apple and CEO Tim Cook there, they just kind of stay out of the conversation for that for fear of poking the bear because they're so dependent on those Chinese consumers buying their stuff.

Speaker 1: Time will tell how effective Musk's foray into politics will be in influencing Trump and his decisions in the next administration. But one thing is for certain, Musk will remain a businessman above all.

Speaker 5: I find that the best lens for understanding Elon Musk and the actions he takes at his companies has to do with like opportunism. He takes advantage of whatever he thinks will make himself and his companies wealthier and more successful. So I don't know how much he and Trump are truly aligned, but they're mutually very useful at this time. .