As the US presidential elections grind towards D-day, Elon Musk has turned into the single largest contributor and most vocal proponent of Donald Trump’s reelection campaign. Musk, the world’s richest man, is now on stage at rallies with Trump, offering cash prizes to potential Republican voters and is turning his social media platform X into a megaphone that amplifies support for the Trump campaign. But there are also multiple contradictions in this developing symbiotic relationship.
Musk may be unflinching in his hardsell of Trump’s candidature, but the billionaire has expressed doubts over the basic tenets of the former US President’s economic plans, especially over the question of whether those measures would indeed supercharge the American economy. Trump has called for mass deportations of undocumented immigrants, a fresh dose of his 2017 tax cuts and a range of other tax tweaks, alongside higher tariffs on practically all imports.
Musk has raised some doubts about the efficacy of these measures. In one of his multiple responses to a pseudonymous X account on October 29 that alluded to an “initial severe overreaction in the economy” and the “market tumbling” if Trump were to be elected and then gets to roll out his plan, Musk had a three word response: “Sounds about right”. On the issue of tax cuts, Musk has acknowledged earlier at a ‘telephone town hall’ that cutting government spending, given the tax cut promises, could be painful.
On the other issue of illegal immigration, the Washington Post released a story on October 26 quoting documents stating how “long before he became one of Donald Trump’s biggest donors and campaign surrogates, Elon Musk worked illegally in the United States as he launched his entrepreneurial career.” South African-born Musk held no legal right to work while building the company that became Zip2, which sold for about $300 million in 1999 and backrolled most of his other ventures. The Post noted that Musk is “arguably America’s most successful immigrant.”
Trump’s climate change denial, ridiculing of EVs
Trump has spent years ridiculing electric vehicles, saying they suffer from range-related issues, are too expensive and are made in China. In keeping with his climate change denialism, Trump has vociferously supported internal combustion engine car makers, batted for the Detroit Big Three (GM, Ford and Chrysler) and has repeatedly promised to end federal support for EVs. For Musk, all of that does present a challenge. His personal wealth is tied largely in Tesla stock and his EV hardsell is fundamentally rooted in the environmentally-friendly pitch of battery electric cars that his car company makes. The Detroit three are among Tesla’s competitors. And any paring down of federal subsidy could be a serious headwind for Tesla going forward, especially at a time when EV sales are seeing a temporary slowdown.
On the EV issues, there is also a larger Republican versus Democrats divide at play. Public opinion research suggests interest in EVs has some partisan roots, with a 2023 Gallup poll finding that 71 per cent of Republicans would not consider buying an EV, compared with 17 per cent of Democrats, while a more recent 2023 Pew Research survey found that 70 per cent of Republican or Republican-leaning Americans were unlikely to consider buying an EV.
The findings of a new Environmental Defense Fund Action study showed that in states where more than 50 per cent of voters linked to EVs were Democrats, only one (Kentucky) voted for Trump in 2020, with the remainder going to President Joe Biden. Also, in traditionally Democratic-leaning states like California, the average road miles between public chargers is under 10, while in states such as North Dakota or Wyoming, there can be more than 500 miles between chargers. In Musk’s support for the Republican candidate, there is this inherent paradox of sorts. But fresh data also shows that some of those sharp divides might be easing off.
Story continues below this ad
The research by the Environmental Defense Fund Action’s February 2024 study, which acquired the voter and vehicle data from L2 – a political firm that analyses and sells voter registration and consumer records – suggests that despite common perceptions, some of these trends could be changing and that not all electric vehicle owners are Democrats. In nine of the 31 states that register voters by party, for example, more Republican voters were reported as being linked to records of electric vehicles – including insurance and repair records – than Democrats. Republicans, independents and third-party voters associated with electric vehicles also exceed Democrats in 24 of those states.
Starlink’s sales pitch versus the diplomatic tightrope
Musk’s Starlink satellite internet service has provided a clear frontline advantage to Ukraine’s smaller military since the 2022 Russian invasion, permitting the Ukrainian forces to share real-time drone feeds between battlefield units, and continue communications in areas where cell phone services have been disrupted by the fighting. Given Trump’s perceived soft corner for Russian president Vladimir Putin, Starlink’s communications support to the Ukraine forces runs somewhat counter to the expectation, even though recent months have seen some recalibrations by Musk’s company. Over the last few weeks, multiple Ukrainian units across the front lines were reported in a CNN story as stating that they had experienced speed problems with Starlink.
Earlier in February, Musk had responded to Ukrainian claims the Russians were “hooked on to” Starlink with a statement that his company “did not do business with the Russian government”, and that the system would not work in Russia. But the CNN report noted that Starlink was unclear if the technology might work in Russian-occupied areas of Ukraine. “If SpaceX obtains knowledge that a Starlink terminal is being used by a sanctioned or unauthorised party, we investigate the claim and take actions to deactivate the terminal if confirmed,” the company said then in a statement.
When it comes to SpaceX, which operates the Starlink satellite system, there is clearly a lot of business that rides on the US government contracts. The company won a $1.8 billion contract with US military and intelligence agencies in 2021 and is now the major rocket launcher for NASA and the Pentagon. For that, Musk has to straddle a diplomatic tightrope with regard to the commercial obligations of his ventures, including Starlink’s Ukraine operations.
Story continues below this ad
Also, for Starlink and for SpaceX, Musk needs access to terrestrial relay stations across the whole world, including Russia and China and other large swathes of territories. Russia also has the capacity to destroy satellites in space and Musk would be keen to avoid that event at any cost. There is a possibility that Musk’s bet on Trump is a deliberate hedge on the potential risks that span from owning a business as large in scope and scale as SpaceX.
Musk’s firings versus Trump’s employee-friendly pitch
Trump has been championing the cause of American workers, labouring for support from prominent union leaders and has been ostensibly against lay-offs. Musk, on the other hand, is synonymous with firings across all of his companies. In January this year, SpaceX was accused by a US labour agency of illegally firing eight employees for circulating a letter calling Musk a “distraction and embarrassment.”
A regional official with the Washington-based National Labor Relations Board (NLRB) had issued a complaint claiming SpaceX violated the workers’ rights under federal labour law to band together and advocate for better working conditions. Then in April, Musk fired practically all of Tesla’s electric-vehicle charging division as part of much wider layoffs. Earlier, there was a massive purging at Twitter when Musk took over.
While the Michigan-based United Auto Workers – a key auto sector labour union – has thrown its weight behind Kamala Harris, Trump has been drumming up support among steel worker groups and projecting himself as a protector of American labour jobs. Musk’s impulsive firings at all of his companies run counter to the pro-employee image that Trump has been desperately cultivating.
