How Elon Musk’s Companies Benefited More from Democratic Administrations than Republican Ones
During the last two weeks, Elon Musk’s support for another Trump Administration took on the look of desperation as he promised the Trump faithful the chance to win $1,000,000 if they register to vote and sign a petition launched by his America PAC. Some pundits think Musk’s ploy is sailing close to the wind in violating election laws. Given his manic support for Trump and Republicans, it might be surprising to quite a few voters and the media that Democrats, not Republicans, are more responsible for the growth of his empire.
In the world of high-stakes business, few names shine as brightly as Elon Musk. With ventures ranging from electric cars to space exploration, Musk has become a symbol of innovation. However, behind the sleek designs of Tesla’s electric vehicles and SpaceX rockets lies another crucial element: government support. Over the years, Musk’s companies have thrived thanks in part to public funds, incentives, and contracts. And while there’s a common perception that Republicans are more business-friendly, it’s actually been the Democrats who have played a more significant role in building Musk’s empire.
The Early Days: Tesla and Clean Energy Under Obama
Tesla, Musk’s flagship company, owes much of its success to the policies implemented by the Obama administration. After the 2008 financial crisis, President Obama sought to stimulate the economy and reduce America’s carbon footprint. This led to the American Recovery and Reinvestment Act of 2009, which allocated billions to support clean energy initiatives. As part of this effort, Tesla received a $465 million loan from the Department of Energy. The loan helped Tesla develop the Model S, which would become a flagship vehicle in the electric car market. This financial lifeline was crucial for Tesla, allowing the company to build its manufacturing base and scale production.
In addition to direct loans, the Obama administration also introduced federal tax credits for electric vehicle buyers, further incentivizing consumers to switch to electric cars. These credits, which offered up to $7,500 per vehicle, made Tesla’s cars more affordable, widening its customer base. While Tesla repaid the loan in 2013, years ahead of schedule, the initial government support was instrumental in propelling the company from a niche startup to a major player in the automotive industry.
The administration’s clean energy focus didn’t stop there. It promoted renewable energy initiatives across the board, which aligned with Tesla’s expansion into solar power through its acquisition of SolarCity in 2016. Although SolarCity’s success has been mixed, the company’s ambitions fit well within the Obama-era push for renewable energy.
SpaceX and the Privatization of Space: A Bipartisan Affair
SpaceX, another cornerstone of Musk’s portfolio, has seen substantial government support across administrations, but it was under President Obama that the company began to soar. In 2010, NASA announced the Commercial Crew Program to end U.S. dependence on Russian spacecraft to send astronauts to the International Space Station (ISS). SpaceX was selected as one of the contractors for this program, eventually winning a $2.6 billion contract to develop and operate the Crew Dragon spacecraft. This partnership was a significant endorsement for SpaceX, positioning it as a critical player in the new era of commercial spaceflight.
This wasn’t just about funding a private company. The Obama administration made a strategic decision to privatize aspects of space exploration, which allowed companies like SpaceX to step into a role traditionally held by government agencies. It was a risk, but one that paid off. SpaceX’s ability to cut costs and deliver reliable services allowed NASA to focus on more ambitious projects while maintaining a strong space presence.
Trump’s Administration: Sustaining Momentum Without Significant Expansion
During President Trump’s term, SpaceX continued to thrive, but much of its success stemmed from ongoing contracts and programs initiated under Obama. Trump’s administration did not roll back the Commercial Crew Program, and SpaceX successfully launched its **first crewed mission** to the ISS in 2020, marking a historic achievement for private spaceflight.
The Trump administration also launched the Space Force and emphasized America’s dominance in space, translating to more Department of Defense contracts for SpaceX. However, these were essentially competitive bids rather than exclusive arrangements for Musk’s company. The administration supported American manufacturing, which indirectly benefited Tesla, but did not introduce new incentives or programs that dramatically altered the trajectory of Musk’s companies.
It’s worth noting that while Tesla continued to benefit from EV tax credits, these credits began to phase out under Trump due to a rule that limited credits to the first 200,000 electric vehicles sold by any manufacturer. By 2019, Tesla had hit that cap, and the tax incentive for its cars was reduced. While the administration did not actively seek to curb clean energy, it was less enthusiastic about supporting it than its predecessor.
The Biden Era: Renewed Focus on Clean Energy
President Biden’s administration has doubled down on clean energy, making it the heart of his economic and environmental policy. The landmark Inflation Reduction Act (IRA) of 2022 includes provisions to expand tax credits for electric vehicles, making them available once again for Tesla buyers. However, this time, the credits are contingent on strict requirements for domestic manufacturing, aligning with Tesla’s U.S. operations and incentivizing further expansion.
The Biden administration has also promoted the expansion of the “nation’s electric vehicle charging infrastructure,” a move that will inevitably benefit Tesla, the market leader. Although Tesla’s own Supercharger network is already extensive, the push for more universal charging stations across the country makes it easier for all EV owners, including Tesla drivers, to find charging options, encouraging more people to switch to electric vehicles.
On the space front, the administration has continued to support SpaceX through ongoing NASA contracts, including the Artemis program, which aims to return humans to the Moon. SpaceX’s role as the provider of the lunar lander for Artemis signals continued confidence in the company’s ability to innovate and deliver under tight deadlines.
Why the Democrats Have Been More Supportive
The question of why Democratic administrations have been more supportive of Musk’s companies can be attributed to policy alignment. The core mission of Tesla and SpaceX — promoting sustainable energy and revolutionizing space exploration — align well with Democratic policy priorities. Democrats have traditionally been more aggressive in addressing climate change, which has led to policies that directly benefit companies like Tesla. Moreover, the focus on innovation and technology as engines of economic growth has opened the door for partnerships with private companies like SpaceX, which can deliver services efficiently and cost-effectively.
It’s also important to note that many of these programs reflect long-term strategies that transcend party lines. While Republicans may be less inclined to introduce new clean energy incentives, they haven’t dismantled existing programs, especially those that serve strategic national interests, like space exploration.
Musk Bites the Hand That Feeds Him: Bipartisan Benefits, But Democratic Foundations
Elon Musk’s companies have benefited from a mix of long-term contracts, subsidies, and incentives. While there’s been bipartisan support for some aspects, particularly in defense and space, the most substantial growth in government spending on Musk’s ventures has roots in policies introduced and expanded under Democratic administrations.
From Obama’s bold move to privatize aspects of space travel and promote renewable energy to Biden’s renewed focus on clean energy and infrastructure, Democrats have laid the foundation that allowed Musk’s companies to thrive. Republicans have kept the momentum going, but without the policy initiatives introduced by Democrats, the trajectory for Tesla and SpaceX might have looked very different. As the world moves further into the era of electric vehicles and private space exploration, the role of government support — especially from those willing to invest in the future — remains a critical factor in shaping the success of companies like Musk’s.
