Elon Musk made a big bet on Trump. Here’s what you’ll gain (and lose) from your victory.

(CNN) – No business leader did more to support former President Donald Trump’s candidacy than Elon Musk. But the billionaire and his business empire are facing both positive and negative consequences after Trump won the presidency again in Tuesday’s election, according to CNN’s projections.

Musk has so far donated nearly $119 million to a political action committee he created to support Trump, according to documents filed with the Federal Election Commission. He appeared with Trump at rallies and gave a fawning interview with his ex on X, his social media platform.

“He made a big bet. He has stymied himself in this election,” said Daniel Ives, technology analyst at Wedbush Securities.

By Wednesday morning, investors were already betting that a Trump victory would also be a victory for Musk’s main publicly traded holding Tesla (TSLA), sending shares of his electric vehicle maker up 13% at the market open. That increased the value of the 411 million Tesla shares Musk fully owns by more than $13 billion, equivalent to a return of more than 11,000% of the $119 million he donated to Trump. But there are risks for Tesla even after Trump’s victory.

Much of Musk’s enormous wealth can be attributed to the government support his companies, such as 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 were cut or eliminated now, as is likely to happen after Trump wins, Musk’s wealth would remain intact. In fact, Tesla could benefit if government support for electric vehicles ends.

On Tuesday evening and early Wednesday morning, Musk posted numerous messages on his social media platform X celebrating Trump’s victory.

“Tonight the American people gave @realDonaldTrump a very clear mandate for change,” he wrote in one.

Trump has been openly hostile to electric cars, saying they are too expensive, have limited range and will destroy jobs and the American auto industry. But what may seem like the biggest blow to Tesla during Trump’s new term—the reduction, if not the end, of federal support for electric vehicles—may not be so bad for Tesla and Musk.

But other policies underlying Trump’s plans could pose serious problems.

Trump has vowed to end what he calls the “Biden EV mandate,” although no such mandate exists and it is unclear what he is talking about.

Under the Biden administration, there has been significant government support for the production and purchase of electric vehicles, including billions of dollars in loans to encourage automakers to invest in electric vehicle and battery factories in the United States, support for charging stations and a $7,500 grant. tax benefit for many electric vehicle buyers.

Many industry experts believe Trump will end these programs. Trump could order the Treasury Department to change the rules governing when car buyers qualify for the credit, which would significantly limit the availability of the tax credit. Or, if Trump has a Republican-controlled Congress, he could push for legislation to eliminate the funding entirely.

But Musk said he wasn’t worried about ending the tax breaks because Tesla sees it as a push for traditional automakers to enter the electric vehicle market and create more competition.

“Abolish subsidies. This will only benefit Tesla,” Musk wrote on X in July.

Thanks to increased competition, Tesla’s global sales fell 2% in the first nine months of this year compared with last year. Sales and earnings improved in the third quarter, but this was the first time the company experienced a downturn of this magnitude in its history.

Trump will likely greenlight Musk’s true autonomous vehicles, which have not yet been produced, as well as a fleet of so-called “robotaxis” that allow rides without any driver on board, Ives said.

CFRA Research analyst Garrett Nelson agreed.

“In our view, Tesla and CEO Elon Musk are arguably the biggest winners from the election, and we believe a Trump victory will help speed regulatory approval of the company’s self-driving technology,” he said in a note to clients on Wednesday, raising their opinion. recommendation for Tesla shares from “Hold” to “Buy”. He raised his 12-month price target on the stock by $110 to $375 per share.

Currently, existing driver assistance features known as Autopilot and Full Self-Driving, or FSD, are under investigation by federal safety authorities after a series of accidents involving the technology. Such investigations could delay operating permits for Tesla’s true self-driving cars, despite Musk’s widely disputed claim that Tesla cars using FSD are already safer than those driven by humans.

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

All government support for electric vehicles is unlikely to disappear under the next Trump administration. In addition to tax breaks for buyers, most of the taxpayer money spent to support the adoption of electric vehicles comes in the form of government loans to automakers and their suppliers to build factories in red Southern states. Trump is unlikely to want to cut that support and job promises in those states, even if they end up competing with Musk and Tesla.

Traditional automakers say they will continue with plans to produce and sell more electric vehicles in the future. They argue that electric vehicles are the future of the industry, even though the pace of adoption has slowed recently.

“This is not a strategy where we’re just betting on the presidential election or the next election and the next one and seeing what we can get with the EPA,” Ford CEO Jim Farley told investors in July. “We believe the only way to survive is to make money from small electric vehicles. And this is our bet.”

Automakers are racing to sell more electric vehicles to help companies comply with increasingly stringent environmental regulations in the United States, Europe and Asia. Even if Trump forces the EPA to change emissions rules here, automakers will remain incentivized to continue producing electric vehicles under rules in other countries or stricter environmental standards in many states, including California, which has its own stricter emissions standards that many follow other states.

Industry experts say they don’t expect electric vehicle sales growth to slow even if Trump changes emissions rules, partly because of rising consumer demand.

“We may see a much slower adoption of electric vehicles (with regulatory changes),” said Jeff Schuster, global director of automotive at GlobalData, an industry consulting firm. “But despite all the investment, we are unlikely to see the situation reverse.”

Tesla’s biggest challenge after Trump’s victory is that there could be a new trade war with China, Ives said, given the importance of the Shanghai plant to its global sales and profits.

After Trump wins, “he will be much tougher on China, and then the negatives may outweigh the positives for Tesla,” Ives said. “More than 40% of supplies come from the Chinese market. Tesla will be caught in the crossfire.”

And it could also be a problem for Tesla if Trump chooses Musk to lead his government’s efforts to cut what they call “government waste,” as both men mentioned during the campaign.

Whatever the outcome of these efforts, and whether Musk plays a formal or informal government role in the new Trump administration, the last thing Tesla investors want to see is Musk being further distracted from his time in front of Tesla, Ives said.

“It’s more time away from Tesla when you need more attention on it,” Ives said.

Musk’s other major company, SpaceX, likely would not have had a significantly different relationship with the federal government regardless of who was elected. Its main competitor, Boeing, is having serious problems with the 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 shut down or impeded by the Biden administration, and it is likely that the incoming Trump administration will not take action against it either. Given the financial losses since the company was purchased, it now represents a relatively small part of Musk’s overall wealth.