How Elon Musk's worst business decision led him to Trump

Elon Musk, the world's wealthiest individual, is set to assume an advisory role under President-elect Donald Trump to enhance governmental efficiency. This adds to the already hefty agenda of Musk, CEO of Tesla and SpaceX, owner of X, and leader of Neuralink, xAI, and the Boring Company. While Musk's engagement with Trump may be classified as advisory, it's yet another commitment diverting him from directing Tesla, the world's leading car manufacturer.

Despite potential distractions, Musk's businesses have continued to thrive. Tesla's recent performance has been challenged by intensified market competition and federal investigations. Its dominance in the electric vehicle sector has weakened, with Chinese rival BYD surpassing Tesla's EV sales. Compounding this, contentious remarks surrounding the anticipated autonomous 'Cybercab' were met with skepticism.

Nonetheless, Tesla's stock has surged 31% post-Election Day, driven by investor optimism about Musk's impending influence on deregulation favoring tech innovations beneficial for Tesla. Analysts highlight Musk's potential impact on AI, China tariffs, and regulatory developments for autonomous vehicles as a pivotal advantage for Tesla investors.

Musk, a significant Tesla shareholder, benefited considerably from the stock rally, evidenced by a $55 billion increase in wealth. While Trump has critiqued electric vehicles, this could inadvertently aid Tesla by phasing out tax credits relied on by competitors, thus reinforcing Tesla's market position. Multiple federal probes into Tesla's self-driving tech are also poised to be resolved under Trump's leadership.

SpaceX remains a formidable competitor, with deregulation potentially favoring its NASA collaborations. Its valuation reportedly soared above $200 billion mid-year. In contrast, X under Musk has encountered substantial challenges, losing significant value amid advertising boycotts linked to its content moderation issues. 

Musk's acquisition of X in 2022, amounting to $44 billion, seemingly intensified his alignment with MAGA ideology, elevating his stature in Trump’s circles. As a result, Tesla's valuation exceeded $1 trillion, making it one of a handful of companies achieving such a feat. However, Musk's success remains contingent on maintaining favorable relations with Trump, notorious for his volatile alliances.