How Much Is Elon Musk’s Advisory Relationship With Trump Worth To Tesla?

Updated on

Tesla CEO Elon Musk is taking an even bigger role within the Trump administration as he’s been asked to serve on the President’s new manufacturing council. The tech entrepreneur already had the ear of President Trump in his capacity as an advisor, so this furthers the relationship even more.

Elon Musk and Donald Trump working on jobs

It would have seemed that a man with a passion for green energy would have nothing in common with a member of the Republican party, which has long supported oil. However, Trump’s goal of getting more jobs into the U.S. aligns closely with Tesla’s practice of manufacturing cars in the U.S., or it does on the surface at least.

While it’s true that Tesla builds its cars in the U.S., keeping jobs here like Trump wants, the automaker focuses heavily on automation, so it employs a lot of robots. The long-term emphasis seems to be on boosting automation at its factories even further, so the question now is just how many jobs Tesla will create for humans rather than robots. Unfortunately, there’s no way we can know for now.

Opportunities for all of Elon Musk’s companies

Regardless, Trump seems to think Elon Musk is all about jobs in the U.S., and the Tesla CEO would be crazy to balk at the chance to whisper in the new President’s ear on a regular basis. Shares of Tesla stock are up by about 17% year to date, despite the decline we’ve seen in the last few days. In fact, they’ve been on the rise since early December as investors started to realize that things might not turn out so bad for the EV maker after all, even though a Republican is in office.

Analysts are now starting to consider what affect Elon Musk’s advisory relationship with Trump will have on Tesla and his other company, SpaceX. The position will bring Musk into contact with the Departments of Transportation (good for Tesla and its Autopilot system) Energy (good for SolarCity and Tesla Energy) and Defense (good for SpaceX).

Trump said to have talked Mars with Elon Musk

Morgan Stanley analyst Adam Jonas upgraded Tesla stock recently, citing—among other factors—Musk’s position as an advisor to President Trump. In a new research note dated Jan. 27, he dove deeper into this relationship to consider all that the two men have in common. One of the topics they were said to have discussed during their recent meeting was Mars, according to The Washington Post, which cited unnamed “reliable sources.” And here we have a link between Trump and Musk’s other company, SpaceX. They were also said to have talked about partnerships between public and private entities.

Jonas does note that Elon Musk has said in the past that it wouldn’t make sense for Tesla and SpaceX to merge, even though he has successfully merged the other two companies he’s currently involved with (Tesla and SolarCity).

What is Trump worth to Tesla?

And so it seems that Elon Musk and Donald Trump have quite a bit to talk about. Jonas considered just how much value the two men’s relationship might have for Tesla stock and concluded that there’s no way to know. However, he also said that if there is any value there, it’s not built into the current stock price.

As far as the question about how many humans Tesla might employ (rather than robots), Jonas suggests up to 50,000 Americans by sometime in the early next decade. He pegs the number of Americans currently employed the EV maker at around 25,000. Looking at the quantitative factor beyond the automotive sphere, Jonas pointed to data from the Center for Automotive Research, which suggests an economic multiplier of ten times for the average vehicle manufacturing job.

“One could argue the high tech manufacturing nature of Tesla’s activities could support a multiple at least as high as the average auto factory job,” the analyst wrote. “Developing and commercializing shared, autonomous, electric transport networks involves coordination in public private partnerships with local and regional/state governments.”

Shares of Tesla stock edged downward by as much as 0.4% to $251.50 during regular trading hours on Friday.

Leave a Comment