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CNN
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No single business leader has supported former President Donald Trump's candidacy more than Elon Musk. But after Trump won back the presidency in Tuesday's election, there are both positives and negatives ahead for the billionaire and his business empire.

According to Federal Election Commission filings, Musk has so far donated nearly $119 million to a political action committee he set up to support Trump. He has appeared with Trump at rallies and conducted a fawning interview with him on X, his social media platform.

“He has put a lot into it here. He jumped into the deep end this election,” said Daniel Ives, technology analyst at Wedbush Securities.

Early Wednesday, investors were already betting that Trump's victory would also be a win for Musk's largest public holding, Tesla (TSLA), sending shares of his electric vehicle maker up 12% in premarket trading. That increased the value of Tesla shares, which Musk fully owns, by more than $12 billion, a return of more than 10,000% on the $119 million he donated to Trump. But a Trump victory also poses risks for Tesla.

Much of Musk's enormous net worth is due to the government support his companies like Tesla and SpaceX have received over the years. Even if Vice President Kamala Harris had won, much of that money would have continued to flow. But even if some government support for electric vehicles is cut or eliminated now, as is likely to happen after Trump's victory, Musk's fortunes will still remain intact. In fact, Tesla could benefit if government support for electric vehicles ends.

Musk posted numerous tweets on his social media platform X late Tuesday and early Wednesday celebrating Trump's victory.

“The people of America gave @realDonaldTrump a crystal clear mandate for change tonight,” he wrote in one of them.

Trump has openly opposed electric vehicles, saying they are too expensive, have limited range and would destroy jobs and the American auto industry. But what might seem like the biggest blow to Tesla from another Trump presidency — a cut, if not an end, to federal support for electric vehicles — might not be so bad for Tesla and Musk.

But other policy areas that are at the center of Trump's plans could also lead to major problems.

Trump has vowed to end what he calls “Biden's EV mandate,” although there is no such mandate and it is unclear what he is referring to.

But under Biden, there has been significant government support for building and purchasing electric vehicles, including billions of dollars in loans to encourage automakers to invest in factories to build electric vehicles and batteries in the United States, support for charging stations and a federal tax credit $7,500 for many electric vehicle car buyers.

Many industry experts believe Trump will end these programs. Trump could direct the Treasury Department to change the rules that determine when car buyers are eligible for the tax credit, which would significantly limit the tax credit's availability. Or, if Trump has a Republican-controlled Congress, he could pass a law to eliminate the credit entirely.

But Musk has said he isn't worried about the end of the tax credit because Tesla sees it as a boon for legacy automakers. Efforts to penetrate the electric vehicle market and create more competition.

“Take away the subsidies. It will only help Tesla,” Musk posted on X in July.

Thanks to increasing competition, Tesla's global sales fell 2% in the first nine months of this year compared to last year. Sales and profits improved in the third quarter, but it was the first time in the company's history that there was such a decline.

It's more likely that Trump will give the green light to Musk's hopes for true self-driving vehicles, Ives said, along with a fleet of so-called “robotaxis” that allow rides without a driver on board.

So far, the company's existing driver assistance features, known as Autopilot and Full Self-Driving (FSD), are under investigation by federal safety regulators after a series of accidents involving the technology. This research could slow the approval of truly self-driving Tesla cars on the roads, despite Musk's widely controversial claims that Teslas with FSD are already safer than human-driven cars.

“Under Trump, these investigations could slowly disappear,” Ives said.

Not all federal support for electric vehicles is likely to disappear under Trump's next administration. Aside from the buyer tax credit, much of the tax money spent to support electric vehicle adoption comes in the form of government loans to automakers and their suppliers to build plants in southern “red” states. It's unlikely that Trump will want to cut that support and the promise of jobs in those states, even if they end up competing with Musk and Tesla.

Traditional automakers say they will continue to push forward with plans to build and sell more electric vehicles in the future. They say electric vehicles are the future of the industry, although adoption rates have slowed recently.

“It's not a strategy where we're going to obstruct the presidential election or the next one and the next one and see what we can do with the EPA,” Ford CEO Jim Farley told investors in July. “The only way we think it's sustainable is to make money from small electric vehicles. And that’s our bet.”

Automakers are pushing to sell more electric vehicles so companies can meet increasingly stringent environmental regulations in the United States, Europe and Asia. Even if Trump gets the EPA to change emissions rules here, automakers will still have an incentive to continue building electric vehicles to meet regulations elsewhere or to meet stricter environmental regulations in many U.S. states, including California, which has its own stricter ones has emissions regulations that many other states follow.

Industry experts don't expect growth in electric vehicle sales to stop even if Trump changes emissions regulations, partly due to growing consumer demand.

“We could see a much slower adoption of electric vehicles (with a change in regulations),” said Jeff Schuster, global head of automotive at GlobalData, an industry consultant. “But despite all the investments, we are unlikely to see a reversal.”

The bigger problem for Tesla with Trump's victory is that it could lead to another trade war with China, Ives said, given the importance of its Shanghai factory to its global sales and profits.

With Trump's victory, “he's going to get much tougher on China, and then the negatives could outweigh the positives for Tesla,” Ives said. “Over 40% of deliveries come from the Chinese market. Tesla would be caught in the crossfire.”

And it could also be a problem for Tesla if Trump taps Musk to lead his administration's efforts to reduce what they call “government waste,” as the two mentioned on the campaign trail.

Whatever the outcome of these efforts, and whether or not Musk has a formal or informal government role in Trump's new administration, the last thing Tesla investors want to see is Musk becoming even more distracted from his time as Tesla boss said Ives.

“It's more time away from Tesla while wanting to pay more attention to Tesla,” Ives said.

Less impact on SpaceX and X

Musk's other major company, SpaceX, likely would not have had a significantly different relationship with the federal government no matter who is elected. Its main competitor, Boeing, is having serious problems with spacecraft that NASA has contracted to carry astronauts to and from the International Space Station.

And Musk's ownership of X has been widely criticized, especially by Democrats, for spreading misinformation. But it has not been halted or hindered by government action under Biden, and the new Trump administration is unlikely to take action on it either. And given the financial losses since purchasing the company, it now represents a relatively small portion of Musk's total net worth.