What's at stake for Elon Musk in the presidential election?
Elon Musk, the world's richest person, has launched a far-reaching effort to help elect former President Donald Trump.
Musk, who owns X, frequently posts messages in support of Trump on the social media platform, where he boasts more than 202 million followers. At Trump rallies, Musk has occasionally appeared on stage to make an impassioned plea for votes. He has also donated nearly $75 million in support of Trump over a three-month period ending in September, government filings show.
Even more, Musk recently began a daily $1 million giveaway to registered voters in battleground states. Philadelphia District Attorney Larry Krasner subsequently sued Musk for allegedly conducting an illegal lottery.
To enter the sweepstake, individuals must sign a petition circulated by Musk's America PAC that pledges support for the First and Second Amendment. The only people eligible to sign are registered voters in seven key swing states, the America PAC website says.
Attorneys for Musk denied the DA's claims of illegality and filed documents on Wednesday seeking to move the case to federal court. The daily lotteries are ongoing.
Musk, who leads Tesla and SpaceX, appears to align with Trump on a host of issues, including mass deportation and deregulation. But the election also holds significant implications for Musk's companies, many of which do business with the U.S. government and face disputes with federal agencies.
"The relationship that Elon Musk has with the federal government is unprecedented," Stephen Diamond, a professor at Santa Clara University Law School who specializes in corporate governance and securities law, told ABC News.
ABC News contacted Musk-owned companies Tesla and Space X in an effort to reach Musk for comment. He did not immediately respond. Musk's America PAC also did not respond to a request for comment.
Here's what's at stake for Musk in the 2024 election:
Government contracts worth billions
A host of Musk-run firms do business with the U.S. government or receive federal support.
"You're talking billions of dollars a year," Richard Pierce, a law professor at George Washington University who focuses on government regulation, told ABC News about Musk's business dealings. "The president has tremendous discretionary power over government contracts."
SpaceX, an aerospace company, counts the U.S. as a key client. In June, NASA awarded SpaceX $843 million to build a vehicle that would aid in taking the International Space Station out of orbit. As recently as last week, the U.S. Space Force awarded SpaceX with more than $700 million to help with a series of launches over the coming years.
Tesla has also received contracts from the Defense Department and the Transportation Department, among other agencies.
In all, SpaceX and Tesla have received at least $15.4 billion in government contracts over the past decade, a New York Times analysis found.
Tesla has also benefited from billions in federal subsidies. Since 2018, Tesla has received $9 billion in such government support, according to a Reuters analysis of securities filings. The funds have primarily stemmed from a program that rewards manufacturers for exceeding carbon emissions limits.
"Musk is intertwined financially with the federal government," Diamond said.
A need for friendlier regulators
Musk-led companies are currently locked in an array of disputes with federal agencies and regulators.
The National Highway Traffic Safety Administration has embarked upon several probes of Tesla over alleged dangers associated with Tesla's self-driving capability. Earlier this month, the NHTSA announced a new investigation regarding the system's ability to navigate conditions of "reduced roadway visibility."
According to Tesla's website, "The currently enabled Autopilot and Full Self-Driving (Supervised) features require active driver supervision and do not make the vehicle autonomous."
Meanwhile, the National Labor Relations Board has filed multiple complaints against SpaceX over the terms of a severance agreement as well as the alleged illegal termination of employees who wrote a letter to management criticizing Musk.
SpaceX sued the NLRB in January claiming that its administrative hearings violate the U.S. Constitution. In the lawsuit, attorneys for SpaceX alleged that proceedings at the NLRB involving in-house judges "deprive [SpaceX] of its constitutional right to trial by jury."
The letter criticizing Musk "caused significant distraction to SpaceX employees around the country," the lawsuit said. Some employees involved with the letter were terminated "for violating numerous company policies," the lawsuit added.
In July, a federal judge in Texas temporarily blocked the NLRB complaints while the company's constitutional challenge makes its way through the courts. The judge did not provide the reasoning for his decision, but such an order requires a finding that the plaintiff will likely prevail in his or her case, Reuters reported.
Federal agencies execute laws enacted by Congress, but enforcement decisions depend largely on directives and personnel decisions made by the sitting president, Pierce said. In turn, he added, the election holds significant implications for Musk in this area.
"The agencies are controlled by the president, and so the president can tell the heads of the agencies to 'do this or do that,'" Pierce added. "They of course have statutory boundaries but they do what the president tells them to do."
In August, Trump praised Musk for his willingness to fire striking workers. "You're the greatest cutter," Trump told Musk during an interview on X. "I look at what you do. You walk in and say, 'You want to quit?' I won't mention the name of the company but they go on strike and you say, 'That's OK. You're all gone.'"
The Trump campaign said support from Musk and other entrepreneurs underscores the strength of the candidate's economic plans.
"President Trump's agenda includes economic, energy and regulatory policies that will allow the US to reclaim its global dominance of innovation and technology. When you have dozens of industry leaders like Elon Musk and David Sacks among the long list of supporters, it is a recognition that President Trump is the clear choice," Brian Hughes, a senior advisor to the Trump campaign, told ABC News in a statement.
A potentially massive tax break
Musk could stand to benefit from a large tax cut if Trump wins the election.
The tax savings may result from a proposed plan from Trump in which Musk would take a role in the Trump administration as head of a new "government efficiency commission." Since Musk's companies do significant business with the federal government, Musk may be required to sell the stakes he holds in the various firms.
Under such circumstances, Musk would likely avail himself of section 1043 of the federal tax code, which allows an individual to put off all capital gains taxes on the sale of such assets.
Enacted in 1992, this piece of tax law aimed to lower the potential costs faced by wealthy people when deciding to join the federal government, Edward McCaffery, a law professor at the University of Southern California who focuses on tax policy, told ABC News.
If he joined the Trump administration, Musk would become the wealthiest person to ever make use of the provision. The tax break could save Musk tens of billions of dollars, according to The Lever, which first reported the potential benefit.
Despite the massive potential tax savings, Musk may attempt to circumvent the requirement or forgo a major role in the administration, McCaffrey said. Musk may not want to give up his holdings in companies over which he holds tight control, nor would it be appealing for Musk to exchange fast-growing stock holdings with the less-attractive investments permitted by law.
"There are reasons to be skeptical," McCaffrey said. "I don't get any glimmer that Musk wants to give up control of Tesla or SpaceX."
ABC News' Ayesha Ali contributed to this report.
