The U.S. is approaching a presidential election. (Business Insider) stated on Monday that this election season is significant for Elon Musk and his business empire.

Since publicly announcing his support for former President Trump in July, Musk has been using X to advocate for the Republican Party, and he has appeared alongside Trump at least at two rallies. He has also hosted a series of political "interviews" on X, having invested over $130 million in activities related to supporting Trump this year. Additionally, he has held a "big lottery" where he randomly gives $1 million each day to registered voters in swing states who sign petitions in support of free speech and gun rights.

Currently, the election race between Trump and Harris remains extremely close, with uncertain outcomes. So, what impact will different election results have on Musk's business empire?

If Trump is elected: Greatly Beneficial

Many of Musk's companies rely heavily on U.S. federal government approvals, regulations, subsidies, or contracts, while Trump has promised to create a more relaxed regulatory environment and plans to lower corporate and personal taxes.

Francesco Trebbi, a professor of business and public policy at UC Berkeley, said that if Trump is elected president, Musk may "install key personnel in the public administration sector" to benefit from it. He noted that this could allow Musk to establish valuable networks within the U.S. government, benefiting him even after Trump’s four-year term ends.

Currently, Trump has adopted some of Musk's policy suggestions in his campaign, such as planning to establish a government efficiency committee led by Musk. Trump has stated that the committee will conduct a "comprehensive financial and performance audit of the entire federal government" and propose "bold reforms."

On October 18 of this year, Musk proposed firing a large number of federal employees at a town hall event in Pennsylvania. "What do you really need 428 agencies for?" Musk said recently at a rally in Pittsburgh, "Maybe even 100 isn’t necessary."

Erik Gordon, chairman of the entrepreneurship area at the University of Michigan's Ross School of Business, stated that Trump's election could also lead to reduced regulatory scrutiny, allowing Musk to "freely develop advanced technologies, which is one of his favorite things to do."

Currently, Tesla is at a critical moment. Investors are closely watching Musk's commitment to fully autonomous vehicles to see if he can obtain approvals in Texas and California. However, government agencies, including the National Highway Traffic Safety Administration, are investigating Tesla's autonomous driving technology, which could hinder the company's plans.

In a recent earnings call, Musk stated that if a government efficiency committee could be established, he would propose creating a "federal approval process for autonomous vehicles" to help expedite state approval processes.

Trebbi stated that for SpaceX, Trump's election could help the company secure large contracts from the U.S. Department of Defense, thereby helping it maintain an edge over competitors like Blue Origin.

If Harris is elected: Uncertainty

While Musk may gain power, government contracts, and relaxed regulations during Trump's term, it is still unclear what impact a Harris administration would have on him.

For Harris, a key policy that many business leaders are watching is her proposed tax plan. She plans to raise the corporate tax rate from 21% to 28%. Bank of America estimates that this move could reduce corporate profits by 5%. Coupled with the potentially stricter regulations that a Harris administration might implement, this could impact many businesses, including those under Musk.

Gordon stated that Harris might introduce new safety regulations or create tax credit policies for electric vehicles or autonomous vehicles that favor Musk's competitors.

Regarding X, which Musk promotes as a free speech platform, Gordon believes that the Harris administration may pressure it to ban content marked as "misinformation." However, Gordon stated that X is likely to win a court case based on the First Amendment.

Tevi Troy, a senior fellow at the Bipartisan Policy Center and former senior White House aide, stated that Harris is unlikely to issue orders targeting Musk, and such actions could likely be illegal. However, Troy also pointed out that Musk might experience "selective enforcement."

"People want government departments to be free from political pressure," said Joan MacLeod Heminway, a law professor at the University of Tennessee, "but the officials in those departments are also human and may inadvertently scrutinize proposals from entities owned or controlled by Musk more closely."

After Harris takes office, Musk's situation may not undergo substantial changes. "There are no strong indications that Harris wants to significantly increase the regulatory burden," said Cary Coglianese, a law professor at the University of Pennsylvania and director of the Penn Program on Regulation.

Tom Narayan, an analyst at Royal Bank of Canada Capital Markets, stated that a Democratic administration might be more favorable to Musk because Harris supports the Inflation Reduction Act (IRA), which involves manufacturing cars in Mexico, while Trump opposes it. The Inflation Reduction Act provides significant benefits to Musk, including a $7,500 tax credit for new electric vehicles and tax credits for solar installations, both of which are favorable to Tesla.

Karoline Leavitt, the national press secretary for Trump's campaign, stated that if Trump is elected president, he will support the auto industry, "providing room for development for both gasoline and electric vehicles." However, Leavitt also noted that Trump plans to terminate the Green New Deal and withdraw unused funds from the Inflation Reduction Act to "quickly defeat inflation and lower all prices."

A Dangerous Game

Trebbi believes that Musk previously expressed support for the Democratic Party, and this alliance with Trump is a way to hedge risks. "I think Musk's alliance with the Republicans is a risk-hedging strategy to prevent government regulation and to ensure that, regardless of who wins in November, his company will receive government support," he stated.

Coglianese stated that Musk may see himself as the one who can "turn the tide of the federal government," just as he did when he acquired Twitter. "You can completely imagine that he sees himself as the savior," said Coglianese.

However, Coglianese pointed out that the strategy of aligning with Trump is risky. "Musk is hoping that Trump will repay his loyalty," Coglianese said. He added that even Trump's staunchest supporters may not necessarily get everything they want.

For example, another billionaire in the U.S., Carl Icahn, served as an advisor during Trump's first term. During this time, the companies he invested in received some policy exemptions from the EPA, but his tenure ended in controversy. The billionaire investor faced criticism for potential conflicts of interest and resigned from his unpaid position in the Trump administration.

Other business leaders closely associated with Trump have achieved more positive outcomes. Trump has stated that Apple CEO Tim Cook is the only CEO who directly called him when facing problems. During Trump's administration, Cook successfully shielded Apple's iPhone from tariffs.

Tennessee law professor Hemingway stated, "Certain types of government positions have ethical standards that require individuals to comply with various obligations, including reporting conflicts of interest. Musk may not want to take on those obligations."