This article originally appeared in the Nightcap magazine for CNN Business. To get it in your inbox, sign up for free below.
Dear audience: Boy was I right.
in August that the idea of a potential Elon Musk cabinet position was absurd because a ) Tesla shareholders, who own the majority of his assets, would revolt even if you ignored the legal and ethical considerations, and b ) you can’t work on government issues that affect your own personal finances.
I’m here to forgive. Because things became significantly wilder than I may have anticipated.
To be clear: It’s not that I was wrong about the conflicts of interest Trump may be subject to — it is almost nothing in government that doesn’t change Musk’s businesses, which span electric vehicles, robotics, artificial intelligence, space exploration, social media, biotechnology, satellite comms and road infrastructure.
However, I hardly understood how viciously Musk had sling his teeth into Donald Trump’s bandwagon to circumvent legal precedent and become the federal government’s .
Essentially, the administration has classified Musk as a” special state employee”. And theoretically, that means he may become subject to federal conflict of interest laws. However, the Justice Department must officially enforce those statutes, and it’s not yet known whether that may happen. Which is all to say, Tesla owners don’t lose any sleep over that one.
Some Tesla investors saw the idea of Trump and Musk in the White House as a “disaster circumstance” over the summer because they wanted Musk, whose juggling have huge irked shareholders, to concentrate on his winning horses, the electric car manufacturer built on the promise of a robotic paradise. However, shareholders seem content to let Musk run wild on the hopes that he’ll slash regulations and ensure any new policies benefit the bottom line since Trump’s decisive win and elevation of” first buddy” Musk.
” A formal cabinet position would have been the game-changer, because it would have changed his CEO role”, Dan Ives, managing director of Wedbush Securities, told me Tuesday. According to him, the current circumstances are different, and “any criticism or blowback is far outweighed by these enormous advantages of Musk’s role in a Trump White House, which will ultimately expedite the autonomous roadmap in the United States.”
( Autonomous driving is only one of several projects Musk has repeatedly overpromised and delivered on.
Ultimately, without any enforcement of conflict of interest laws, Musk’s ascension is effectively a cash grab.
Businesses have been sent scrambling as a result of the chaotic Trump agenda that Musk is supporting. But not Musk’s businesses.
The potential 25 % tariff on Mexican and Canadian parts, which would increase American car prices, has been a source of concern for US automakers in particular. But Tesla didn’t need to sweat those restrictions nearly as much as Ford, GM and Stellantis. That’s because while there’s no such thing as a fully “all-American” car, as my colleague , Tesla makes one of the few vehicles that is more American-made than most: the Model 3. That means Tesla might not be subject to the same level of burden as its bigger competitors if tariffs are imposed on Mexico and Canada in the future.
Trump’s cancellation of EV tax credits, which Musk supported, could still hurt Tesla, of course. However, it almost certainly will hurt Tesla’s domestic rivals more.
And then there’s SpaceX, Musk’s privately owned rocket company, which has become a critical supplier to America’s national space ecosystem. In the last ten years, the business has been awarded at least$ 15 billion in federal contracts. And it seems unlikely that the DOGE bros, who claim to be sifting out wasteful costs from the federal budget, will breach any of those agreements.
Bottom line: I’ve learned my lesson about predicting the future. However, we can see where all of this is heading by looking at Musk’s recent history.
Buying Twitter in 2022 was, by traditional metrics, a financial disaster. He killed the platform’s brand, both literally and spiritually, by renaming it X, welcoming neo-Nazi accounts and ultimately by an estimated 80 %. However,$ 44 billion ultimately came to be a small price for what Musk ultimately received: a political megaphone he could use to support the election of a president who would permit the aspiring tech oligarch to rule the country’s infrastructure.
Now, with the support of DOGE, Musk has a chance to grow and guard his business empire almost without any restraint. President Trump on Monday sought to reassure folks that” Elon can’t do, and won’t do, anything without our approval”. But so far, at least, Musk hasn’t reached the end of his leash.
My August headline read,” Let’s throw cold water on the Musk working for Trump thing”. And in some sense, I stand by that. Musk is working in the White House, but, as ever, Musk is working for himself.