Trump Invests 200 Billion Won, Musk Earns 20 Trillion Won... Cabinet Appointment Benefits Are a Bonus [Business & Issues]

Tesla Stock Soars on Policy Benefit Expectations
Musk Donates 200 Billion, Impact of SNS Strategy
Expected Benefits from Regulatory Easing on Autonomous Vehicles

On the 5th of last month (local time), Elon Musk, CEO of Tesla, participated in a presidential campaign rally for former President Donald Trump in Pennsylvania and gave a public speech. Photo by AFP Yonhap News

Elon Musk, CEO of Tesla, is increasingly likely to join the second Trump administration cabinet, driving Tesla's stock price to surge daily amid expectations of policy benefits. Musk, who is credited with playing a decisive role in Donald Trump's presidential victory, is expected to actively pursue the removal of various industrial regulations within the U.S. government organization. Both inside and outside the U.S., analysts suggest that since Musk donated over 200 billion Korean won during Trump's election campaign and his assets increased by more than 20 trillion won due to the subsequent stock price surge, this will be remembered not just as political participation but as a successful investment case.

Musk Expected to Join Trump’s Second Administration… Tesla Soars

According to CNBC, Tesla's stock price reached $296.91 on the 7th (local time), marking a three-day consecutive rise since the U.S. election day on the 5th. This is a surge of over 22% compared to $242.84 on the 4th, the day before the election. The possibility of Musk joining the administration after Trump's victory sparked investor enthusiasm, riding on expectations of policy benefits.

Until last month, Tesla's stock had shown some weakness due to third-quarter earnings falling short of market expectations and regulatory concerns following the unveiling of the fully autonomous robo-taxi 'Cybercap.' Tesla's third-quarter revenue, announced on the 23rd of last month, was $25.182 billion, up 7.85% year-over-year but about 1% below market estimates.

However, following Trump's election victory, expectations of Musk's cabinet appointment have driven Tesla's stock price sharply upward. In early September, Trump announced at a campaign rally that he would create a Government Efficiency Committee to audit the entire federal government's finances and performance and propose bold reforms, with Musk agreeing to lead the committee. This organization, jointly conceived by Trump and Musk, is expected to eliminate wasteful budget programs and unnecessary industrial regulations.

Musk himself appeared at a rally on the 27th of last month, referring to the Government Efficiency Committee as the 'Department of Government Efficiency,' emphasizing, "The U.S. federal government's budget can be cut by more than $2 trillion, about one-third of its current size. The Department of Government Efficiency will fix that."

Musk’s 200 Billion Won Donation That Propelled Trump’s Victory… SNS and Lottery Events Targeting Voters

On the 26th of last month (local time), Elon Musk, CEO of Tesla, awarded a prize of 1 million dollars (approximately 1.4 billion won) to a voter who won the 'Trump Lottery' at the America Pack Townhall event held in Lancaster, Pennsylvania. Photo by AFP Yonhap News

The surge in Tesla's stock price has also significantly increased Musk's personal wealth. According to the U.S. business magazine Fortune, on the 6th, immediately after the election results were announced, Musk's assets increased by $15 billion (approximately 20.745 trillion won) in a single day, reaching $286 billion. Considering that Musk donated $175 million (about 242 billion won) to the Trump campaign during the U.S. election period, this represents an enormous return on investment.

According to CNN, Musk began publicly supporting the Trump campaign starting July 13, when Trump was shot during a rally in Pennsylvania. After the Trump campaign showed signs of weakness following Joe Biden's presidential candidacy and Kamala Harris's vice-presidential nomination, Musk used his social networking service (SNS), X (formerly Twitter), to encourage widespread voting activities and provided financial support.

Additionally, Musk's so-called 'Trump Lottery' event targeting conservative voters was credited with effectively consolidating votes in key battleground states. From October 19 until the election on November 5, Musk held a lottery in which one resident each day from seven battleground states?Pennsylvania, Arizona, Michigan, Georgia, Nevada, North Carolina, and Wisconsin?who signed petitions supporting the First Amendment (freedom of speech) and the Second Amendment (right to bear arms) were entered to win a $1 million (about 1.4 billion won) prize.

Although the Philadelphia District Attorney filed a civil lawsuit claiming the event was an illegal lottery, a U.S. court ruled that the event could continue until election day, drawing further attention. A total of 18 voters received $18 million in prizes through this event, significantly impacting the Trump campaign's momentum.

Expectations of Policy Benefits for Tesla, SpaceX, etc.… Will Autonomous Driving Regulations Ease?

AP Yonhap News

If Musk actually joins the second Trump administration, the industry expected to benefit the most is Tesla's autonomous electric vehicle sector. This area has faced challenges in expansion due to safety-related regulations imposed by U.S. government authorities, so easing these regulations could lead to rapid growth.

Major foreign media, citing sources familiar with autonomous electric vehicle regulations, reported that the U.S. National Highway Traffic Safety Administration (NHTSA) has been conducting a safety investigation into Tesla's Autopilot feature since last month. If Musk joins the administration, potential actions related to this investigation might be put on hold. At the very least, during Trump's second term, Musk could steer regulatory directions favorably for Tesla's planned full autonomous driving technology and robo-taxi services over the next four years.

There is also analysis that Musk's aerospace company, SpaceX, will be freed from regulatory conflicts with the Federal Aviation Administration (FAA) that have hampered its operations. According to space industry media Space.com, SpaceX's Falcon 9 rocket experienced a series of malfunctions from July to October, resulting in three launch bans issued by the FAA. SpaceX requested the lifting of these bans, citing no casualties or other safety issues, but the FAA maintained a tough stance, prolonging the conflict.