In a widely expected yet nonetheless supremely unconventional move from a supremely unconventional president-elect, Donald Trump has created a new non-governmental department custom fit for the world’s richest man turned Trump surrogate Elon Musk.
Musk will share his duties at Tesla Inc (NASDAQ:TSLA), SpaceX, xAI and Twitter/X with a new role as co-head of the Department of Governmental Efficiency (DOGE), alongside biotech billionaire Vivek Ramaswamy.
Key to the role will be slashing government spending, bureaucracy and excess regulations.
While Musks’s first government-adjacent position could risk stretching his man hours even thinner, analysts at Wedbush believe the rewards will be greater.
Betting on Trump was a “poker move for the ages”, said Wedbush. “While Musk will now have another role to balance along with his myriad of other roles at Tesla/SpaceX/xAI, we believe the major benefits for Musk and Tesla far outweigh any negatives.”
“Since this is not an official Cabinet or US government position and it's essentially newly created, there will be NO changes to Musk's CEO roles with Tesla and SpaceX importantly from the Street's perspective,” analysts stated.
“We would also expect Musk to have a key role on many of the new AI initiatives within the government (AI Ambassador) as well as China tariff discussions over the coming months as Trump gets ready to take the Oval Office in January.”
It may sound contradictory for Musk, whose businesses rely heavily on government subsidies, to advocate for lower governmental spending (not to mention advocating for a president who is generally ambivalent towards electric vehicles).
But Tesla could be the sole EV benefactor of an EV-sceptical administration that has promised to remove any tax incentives in the EV industry.
“Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment,” said Wedbush analyst Dan Ives previously stated.
Higher China tariffs “would continue to push away cheaper Chinese EV players (BYD, Nio, etc.) from flooding the US market over the coming years”, he added.
Musk’s gamble has paid off in the immediate term- Tesla shares have surged 50% in a month to reclaim a trillion-dollar market capitalisation, making Musk, as the company’s largest shareholder, substantially richer on paper.
Whether Musk can keep the gamble paying off will be determined in the following four years of Trump’s presidency.
In the meantime, Wedbush has a $400 share price target on Tesla against the current shrer price of $328.5.