Elon Musk, the billionaire owner of Tesla and X, saw his wealth increase by approximately $13 billion just hours after his ally, Donald Trump, emerged victorious in the United States presidential election.
On Wednesday morning, investors reacted positively to Trump’s win, viewing it as beneficial for Musk’s primary public asset, Tesla (TSLA). This optimism drove the stock price of the electric vehicle manufacturer up by 13% at the market open, according to CNN.
As a result, the value of Musk‘s 411 million Tesla shares rose by more than $13 billion, representing an impressive return of over 11,000% on the $119 million he contributed to support Trump.
Musk is one of the most prominent business leaders backing Trump. Federal Election Commission filings reveal that he has donated nearly $119 million to a political action committee he established to support the former president. Additionally, Musk has participated in Trump’s rallies and hosted a complimentary interview with him on X, his social media platform.
“He’s made a significant bet on this election, fully committing to his support,” remarked Daniel Ives, a tech analyst at Wedbush Securities.
Much of Musk‘s considerable net worth is linked to the government support his companies, including Tesla and SpaceX, have received over the years. Even if Vice President Kamala Harris had won the election, this financial backing would likely have continued.
Although Trump‘s victory may lead to a reduction or cessation of government support for electric vehicles, which could impact Musk’s wealth, Tesla may still benefit if such backing diminishes.
Musk took to his social media platform X late Tuesday and early Wednesday to celebrate Trump’s win, posting, “The people of America gave @realDonaldTrump a crystal clear mandate for change tonight.”
However, Trump’s presidency could also pose challenges for Musk’s investments. The former president has expressed scepticism about electric vehicles, calling them expensive, limiting in range, and detrimental to American jobs and the auto industry. While the potential reduction or elimination of federal support for EVs could damage Tesla, it may not be as harmful as anticipated.
Additionally, Trump has promised to dismantle what he calls “Biden’s EV mandate,” even though no such mandate exists, leaving his intentions unclear.
Under Biden, significant government support for developing and purchasing electric vehicles has been established, including billions in loans to encourage automakers to invest in EV and battery production in the United States, funding for charging stations, and a $7,500 tax credit for eligible electric car buyers.
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