Washington’s next bet could be Elon Musk’s lifeline (TSLA)
Despite a rocky relationship between President Donald Trump and Tesla CEO Elon Musk, the U.S. government may be preparing a policy shift that could indirectly benefit the automaker as it searches for its next growth driver beyond electric vehicles.
After a major push into artificial intelligence, the administration is now signaling increased support for robotics. Commerce Secretary Howard Lutnick recently said U.S. chief executives in the sector are “all in” on accelerating development.
According to Politico, the administration is considering a new executive order focused on robotics as early as next year. While details remain limited, the prospect of federal support for automation and advanced manufacturing has already stirred investor interest.
Tesla shares jumped more than 4% Wednesday following the report. The move followed a recent analysis from InvestorsObserver, which showed that Tesla has been among the weakest performers in the so-called Magnificent Seven this year.
The stock has also trailed both the S&P 500 and the Nasdaq Composite amid slowing growth expectations and political backlash tied to Musk.
Although Musk and Trump had a very public falling-out earlier this year, their relationship has since thawed. With Tesla’s EV sales growth under pressure, Musk has increasingly emphasized the company’s ambitions in robotics and autonomous systems, positioning Tesla to potentially benefit from a broader federal push into the sector.
Tesla’s robotics push
Tesla has increasingly emphasized robotics as part of its long-term growth strategy, highlighted by the continued development of Optimus, its humanoid robot. While the project was first unveiled in 2021, Tesla has accelerated updates and demonstrations in recent years, signaling a deeper commitment to the technology.
The company has positioned Optimus as a solution for workplace automation, particularly in environments involving physically demanding or potentially hazardous tasks. Tesla claims the robot is designed to enhance efficiency while reducing reliance on human labor for specific industrial tasks.
At the same time, Tesla is working to redefine itself beyond its core identity as an electric vehicle manufacturer. The company now increasingly presents itself as an AI and robotics firm.
Optimus is built on Tesla’s existing artificial intelligence and autonomy platform, allowing the company to share research and development across its vehicle and robotics programs.
Musk rides government mandates
Musk’s ability to align his businesses with government priorities isn’t a new phenomenon. For years, Tesla relied heavily on government-backed carbon credit programs, which allow automakers that exceed emissions standards to sell credits to companies that fall short.
Those credit sales generated billions of dollars and helped Tesla reach and maintain profitability during key growth periods.
Before his public falling-out with President Trump, Musk’s rocket company, SpaceX, was also a major beneficiary of federal spending. SpaceX has secured billions of dollars in government contracts for military launches and NASA-funded space missions, making the U.S. government its largest customer.
Together, those ties underscore how closely Musk’s business success has been linked to public policy and taxpayer-backed programs, even as his relationship with Washington has shifted over time.