By Marisa Taylor, Rachael Levy and Chris Kirkham
(Reuters) -Elon Musk’s backing of Donald Trump’s decisive victory for a second presidency offers the billionaire entrepreneur extraordinary affect to assist his firms safe favorable authorities remedy.
Musk contributed at the very least $119 million to a pro-Trump spending group, federal data present, and tirelessly touted the previous president on the vital late stage of his marketing campaign.
Musk’s politicking displays a wider technique to insulate his firms from regulation or enforcement and increase their authorities help, in accordance with Reuters interviews with six Musk-company sources acquainted with his political and enterprise dealings and two authorities officers who’ve in depth interactions with Musk companies. The sources offered a uncommon view of the strategizing inside Musk’s companies to take full benefit of his deepening relationship with Trump.
Musk’s enterprise pursuits – from Tesla (NASDAQ:) electrical autos to SpaceX rockets and Neuralink mind chips – rely closely on authorities regulation, subsidies or coverage.
“Elon Musk sees all regulations as getting in the way of his businesses and innovation,” mentioned one former high SpaceX official who spoke on situation of anonymity. “He sees the Trump administration as the vehicle for getting rid of as many regulations as he can, so he can do whatever he wants, as fast as he wants.”
Musk endorsed Trump on July 13, the day the candidate was shot within the ear in a Pennsylvania assassination try. Musk’s donations financed an intensive get-out-the-vote effort as Trump confronted a stiffer problem after Vice President Kamala Harris changed President Joe Biden in July because the Democratic presidential nominee. Musk spent election night time with the president-elect at his Mar-a-Lago membership in Florida, and Trump has mentioned he would identify Musk as his administration’s “efficiency czar.”
Tesla, SpaceX, Neuralink and Musk didn’t reply to requests for remark. The Trump marketing campaign known as Musk a “once-in-a-generation industry leader” in a press release to Reuters, including that the “broken federal bureaucracy will certainly benefit from his ideas and efficiency.”
Musk as soon as long-established his picture primarily round combating local weather change by constructing electrical vehicles to cut back air pollution and rockets that might at some point assist people flee to Mars from a dying Earth. He is now on the forefront of a rising class of Silicon Valley billionaires championing a libertarian motion as a backlash to the California area’s traditionally liberal ideology – which Musk now derides as a “woke mind virus.”
His rising political involvement may put his industrial empire ready that present and former workers likened to the Gilded Age, when business barons resembling J.P. Morgan and John D. Rockefeller held broad sway over authorities coverage impacting their companies and wealth.
Musk’s rising energy excited his backers who view authorities as an obstacle to his high-tech operations, together with Shervin Pishevar, a enterprise capitalist who has invested in SpaceX and advocated for Silicon Valley’s shift towards Trump. Chopping regulation, he mentioned, would pace SpaceX’s efforts to get to Mars.
“He’s going to make America function like a startup,” Pishevar mentioned of Musk. “There’s no greater entrepreneur in American history than Elon Musk.”
DRIVING AUTO POLICY
Musk’s political ascension comes after perceived slights under the Biden administration that accelerated Musk’s embrace of Trump’s right-wing populism. For example, Tesla wasn’t invited to an August 2021 EV summit at the White House that featured only unionized Detroit automakers that produce a fraction of the EVs Tesla sells.
The fortunes of Tesla could rise or fall depending on Trump’s treatment of the diverse array of subsidies, policies and regulatory schemes for electric and autonomous vehicles. Democratic administrations have historically championed many such pro-EV policies, with Tesla’s support. Musk could potentially now protect them despite the Republican party’s traditional rejection of EVs – and Trump’s ridicule of Biden’s EV policy on the campaign trail.
For Tesla, Musk’s goals include getting the U.S. National Highway Traffic Safety Administration (NHTSA), its primary federal safety regulator, to hold off on potential enforcement actions involving the safety of Tesla’s current driver-assistance systems, called “Autopilot” and “Full Self-Driving,” according to a person familiar with the matter.
Musk’s “primary focus over the next four years,” the person said, would be “de-enforcement.”
Musk, the source said, could also push for favorable regulation of autonomous vehicles and robotaxis that Tesla plans. For his new artificial intelligence startup xAI, Musk could shape nascent rules or a new agency, the person said.
Musk said last month that he expects to roll out driverless Teslas in California and Texas by next year and start production in 2026 on a fully autonomous “Cybercab” with no steering wheel or pedals. Tesla would want a waiver from NHTSA to supply such a automobile.
There aren’t any nationwide laws governing how autonomous autos could be deployed. Which means operators must take care of totally different laws in every state. Musk bemoaned the challenges of the state-by-state regulatory panorama in a Tesla earnings name final month and advocated for one federal approval course of.
Brian Mulberry, consumer portfolio supervisor at Zacks Funding Administration, a Tesla investor, mentioned a streamlined, uniform set of autonomous-driving laws might present Tesla the most important increase of any coverage Musk would possibly affect. A “slimmer, trimmer federal Division of Transportation that offers common sense tips” would give Tesla “room to show their case” for the technology’s safety, he said.
Despite Musk’s complaints of stifling bureaucracy, SpaceX currently leads the world in government-financed rocket launches and Tesla sells nearly two million heavily subsidized EVs annually.
Tesla shares closed up about 15% on Wednesday.
At his brain-implant startup Neuralink, Musk has long complained that the U.S. Food and Drug Administration approval process has slowed the firm from implanting the device in humans. Musk could use his rising clout in a Trump administration to cut through some of the safety-related approvals in that process, according to a source familiar with the company’s operations.
Musk has long expressed frustration about the FDA’s pace. Some Neuralink employees are considering the prospect that Musk, if he becomes Trump’s “efficiency” chief, could get FDA officials he deems inefficient fired, said a person familiar with the matter.
GROWING POWER
Musk’s designs on setting up a lax regulatory environment come as his companies already face fewer regulatory requirements and softer enforcement of current federal rules, according to the six Musk company sources familiar with his regulatory dealings and political strategy. Some federal agencies already struggle to muster the political will to go after Musk companies for alleged policy violations or safety issues, they said, in part because Musk is the dominant player in highly-regulated and politicized industries such as electric cars and rockets.
NASA, for instance, has relied on SpaceX’s know-how in missions such as the expected rescue of Boeing’s Starliner astronauts who are still stranded in space.
NASA and other agencies often try to avoid alienating the company, said a federal official who is familiar with the company’s government interactions and spoke on condition of anonymity. “NASA needs SpaceX more than SpaceX needs NASA,” the official said.
NASA has invested more than $15 billion in SpaceX. SpaceX is also separately developing a network of hundreds of spy satellites with a U.S. intelligence agency, Reuters has reported.
A Reuters investigation last year documented at least 600 worker injuries at SpaceX facilities nationwide and found that Musk’s rocket company disregarded safety regulations and standard practices. Worker injury rates at SpaceX facilities also continued to exceed an industry average last year, according to a Reuters review of safety data.
Neither NASA nor OSHA, which regulates worker safety, has taken any significant enforcement action against SpaceX over worker injuries and related reporting violations. NASA declined to comment on Musk’s potential influence after Trump’s election.
Musk has nonetheless excoriated the government for trying to enforce the rules even as his company has moved faster than competitors. In an interview before the election, he described federal enforcement as overly harsh and said he aimed to get rid of “insane” regulations.
“Eventually, you just can’t get anything done,” said Musk during an appearance at the All-in Summit, a gathering affiliated with a tech podcast by the same name.
However, the U.S. government does not regulate the safety of participants in private space flights in orbit due to a temporary congressionally imposed ban on the agency’s oversight, to encourage innovation in the industry. A Trump administration, influenced by Musk, is expected to push for softer regulations on this front, according to four SpaceX sources familiar with its regulatory strategy.
Musk and SpaceX see the corporate’s dominance as proof that it might probably deal with much less oversight, the sources mentioned, at the same time as an unfettered Musk may have unintended penalties for the business.
One former SpaceX official cautioned that taking a lax regulatory perspective in a sector as harmful as rocket-building “may blow up in everybody’s face and set again the business for a decade.”
