What’s at stake for Elon Musk in the presidential election?

Elon Muskthe richest person in the world, has launch a large-scale effort to help elect former President Donald Trump.

Musk, who owns X, frequently posts messages in support of Trump on the social media platform, where he boasts more than 202 million followers. At Trump rallies, Musk occasionally appeared on stage to make an impassioned plea for votes. He also donated nearly $75 million to Trump in a three-month period ending in September, government filings show.

Even more so, Musk recently it started a $1 million daily donation to registered voters in battleground states. Philadelphia District Attorney Larry Krasner later sued Musk for allegedly running an illegal lottery.

To enter the sweepstakes, people must sign a petition circulated by Musk’s America PAC pledging support for the First and Second Amendments. The only people eligible to sign are registered voters in seven key states, the America PAC website says.

Musk’s lawyers denied the prosecutor’s claims of wrongdoing and filed documents Wednesday to move the case to federal court. Daily lotteries are ongoing.

Musk, who runs Tesla and SpaceX, appears to be aligning with Trump on a number of issues, including mass deportation and deregulation. But the election also has significant implications for Musk’s companies, many of which do business with the US government and face disputes with federal agencies.

“The relationship that Elon Musk has with the federal government is unprecedented,” Stephen Diamond, a professor at Santa Clara University School of Law who specializes in corporate governance and securities law, told ABC News.

ABC News reached out to Musk-owned companies Tesla and Space X in an effort to reach Musk for comment. He didn’t answer right away. Musk’s America PAC also did not respond to a request for comment.

Here’s what’s at stake for Musk in the 2024 election:

Government contracts worth billions

A number of Musk’s companies do business with the US government or receive federal support.

“You’re talking billions of dollars a year,” Richard Pierce, a law professor at George Washington University who focuses on government regulation, told ABC News of Musk’s businesses. “The president has tremendous discretion over government contracts.”

SpaceX, an aerospace company, counts the US as a key customer. In June, NASA awarded SpaceX $843 million to build a vehicle that would help lift the International Space Station out of orbit. As recently as last week, the US Space Force awarded SpaceX more than $700 million to help with a series of launches over the coming years.

Tesla has also received contracts from the Department of Defense and the Department of Transportation, among other agencies.

In total, SpaceX and Tesla have received at least $15.4 billion in government contracts over the past decade, a New York Times analysis found.

Tesla has also benefited from billions in federal subsidies. As of 2018, Tesla has received $9 billion in government support, according to a Reuters analysis of securities files. The funds came mainly from a program that rewards manufacturers for exceeding carbon emission limits.

“Musk is financially intertwined with the federal government,” Diamond said.

A need for friendlier regulators

Musk’s companies are currently locked in a series of disputes with federal agencies and regulators.

The National Highway Traffic Safety Administration has initiated several investigations of Tesla into alleged dangers associated with Tesla’s self-driving capability. Earlier this month, NHTSA announced a new investigation into the system’s ability to navigate in “reduced road visibility” conditions.

According to Tesla website“Autopilot and fully autonomous (supervised) driving features currently enabled require active driver supervision and do not make the vehicle autonomous.”

Meanwhile, the National Labor Relations Board has filed multiple complaints against SpaceX over the terms of a severance agreement, as well as the alleged wrongful termination of employees who wrote a letter to management criticizing Musk.

SpaceX sued the NLRB in January, claiming its administrative hearings violate the US Constitution. In the lawsuit, SpaceX attorneys argued that NLRB proceedings involving domestic judges “deprive (SpaceX) of its constitutional right to a jury trial.”

The letter criticizing Musk “caused significant distraction to SpaceX employees across the country,” the suit says. Some employees involved in the letter were fired “for violating numerous company policies,” the suit added.

In July, a federal judge in Texas temporarily blocked the NLRB complaints while the company’s constitutional challenge works its way through the courts. The judge did not provide reasons for his decision, but such an order requires a finding that the plaintiff is likely to prevail in his case, Reuters reported.

Federal agencies execute laws passed by Congress, but enforcement decisions depend heavily on directives and personnel decisions made by the sitting president, Pierce said. In turn, he added, the election has significant implications for Musk in this area.

“The agencies are controlled by the president, and so the president can tell the heads of the agencies to do this or do that,” Pierce added. “Of course they have statutory limits, but they do what the president tells them to do.”

In August, Trump praised Musk for his willingness to fire striking workers. “You’re the ultimate cutter,” Trump told Musk during an interview at X. “I look at what you’re doing. You go in and say, “Do you want to quit?” I won’t mention the name of the company, but they go on strike and you say, “You’re all out.”

The Trump campaign said the support of Musk and other entrepreneurs underscores the strength of the candidate’s economic plans.

“President Trump’s agenda includes economic, energy and regulatory policies that will allow the US to regain global dominance in innovation and technology. When you have dozens of industry leaders like Elon Musk and David Sacks among your long list of supporters, it’s recognition. that President Trump is the clear choice,” Brian Hughes, a senior adviser to the Trump campaign, said in a statement to ABC News.

A potentially massive tax break

Musk could get a big tax cut if Trump wins the election.

The tax savings could result from a plan Trump has proposed in which Musk would have a role in the Trump administration as head of a new “commission on government efficiency.” Because Musk’s companies do significant business with the federal government, Musk may be required to sell the stakes he owns in the various firms.

In such circumstances, Musk would likely use section 1043 of the federal tax code, which allows an individual to defer all capital gains taxes on the sale of such assets.

Enacted in 1992, this tax law was intended to reduce the potential costs that wealthy people face when they decide to join the federal government, said Edward McCaffery, a law professor at the University of Southern California who focuses on tax policy. told ABC News.

If he were to join the Trump administration, Musk would become the richest person ever to use the provision. The tax break could save Musk tens of billions of dollars, according to the report leverwho first reported the potential benefit.

Despite the potential massive tax savings, Musk could try to circumvent that requirement or give up a major role in the administration, McCaffrey said. Musk may not want to give up his holdings in companies over which he has close control, nor would it be attractive to Musk to trade high-growth stocks for the less attractive investments allowed by law.

“There’s reason to be skeptical,” McCaffrey said. “I don’t see any inkling that Musk wants to give up control of Tesla or SpaceX.”

ABC News’ Ayesha Ali contributed to this report.