(Updates to add Trump campaign comment, Tesla investor comment

and detail about Neuralink regulation)

By Marisa Taylor, Rachael Levy and Chris Kirkham

Nov 6 (Reuters) - Elon Musk's backing of Donald Trump's

decisive victory for a second presidency gives the billionaire

entrepreneur extraordinary influence to help his companies

secure favorable government treatment.

Musk contributed at least $119 million to a pro-Trump

spending group, federal records show, and tirelessly touted the

former president at the critical late stage of his campaign.

Musk's politicking reflects a wider strategy to insulate his

companies from regulation or enforcement and boost their

government support, according to Reuters interviews with six

Musk-company sources familiar with his political and business

dealings and two government officials who have extensive

interactions with Musk firms. The sources provided a rare view

of the strategizing inside Musk's firms to take full advantage

of his deepening relationship with Trump.

Musk's business interests - from Tesla electric vehicles

to SpaceX rockets and Neuralink brain chips - depend heavily on

government regulation, subsidies or policy.

"Elon Musk sees all regulations as getting in the way of his

businesses and innovation," said one former top SpaceX official

who spoke on condition of anonymity. "He sees the Trump

administration as the vehicle for getting rid of as many

regulations as he can, so he can do whatever he wants, as fast

as he wants."

Musk endorsed Trump on July 13, the day the candidate was

shot in the ear in a Pennsylvania assassination attempt. Musk's

donations financed an extensive get-out-the-vote effort as Trump

faced a stiffer challenge after Vice President Kamala Harris

replaced President Joe Biden in July as the Democratic

presidential nominee. Musk spent election night with the

president-elect at his Mar-a-Lago club in Florida, and Trump has

said he would name Musk as his administration's "efficiency

czar."

Tesla, SpaceX, Neuralink and Musk did not respond to

requests for comment. The Trump campaign called Musk a

"once-in-a-generation industry leader" in a statement to

Reuters, adding that the "broken federal bureaucracy will

certainly benefit from his ideas and efficiency."

Musk once fashioned his image primarily around fighting

climate change by building electric cars to reduce pollution and

rockets that could one day help humans flee to Mars from a dying

Earth. He's now at the forefront of a growing class of Silicon

Valley billionaires championing a libertarian movement as a

backlash to the California region's historically liberal

ideology - which Musk now derides as a "woke mind virus."

His rising political involvement could put his industrial

empire in a position that current and former employees likened

to the Gilded Age, when industry barons such as J.P. Morgan and

John D. Rockefeller held broad sway over government policy

impacting their businesses and wealth.

Musk's growing power excited his backers who view government

as an impediment to his high-tech operations, including Shervin

Pishevar, a venture capitalist who has invested in SpaceX and

advocated for Silicon Valley's shift toward Trump. Cutting

regulation, he said, would speed SpaceX's efforts to get to

Mars.

"He's going to make America function like a startup,"

Pishevar said of Musk. "There's no greater entrepreneur in

American history than Elon Musk."

DRIVING AUTO POLICY

Musk's political ascension comes after perceived slights

under the Biden administration that accelerated Musk's embrace

of Trump's right-wing populism. For example, Tesla wasn't

invited to an August 2021 EV summit at the White House that

featured only unionized Detroit automakers that produce a

fraction of the EVs Tesla sells.

The fortunes of Tesla could rise or fall depending on

Trump's treatment of the diverse array of subsidies, policies

and regulatory schemes for electric and autonomous vehicles.

Democratic administrations have historically championed many

such pro-EV policies, with Tesla's support. Musk could

potentially now protect them despite the Republican party's

traditional rejection of EVs - and Trump's ridicule of Biden's

EV policy on the campaign trail.

For Tesla, Musk's goals include getting the U.S. National

Highway Traffic Safety Administration (NHTSA), its primary

federal safety regulator, to hold off on potential enforcement

actions involving the safety of Tesla's current

driver-assistance systems, called "Autopilot" and "Full

Self-Driving," according to a person familiar with the matter.

Musk's "primary focus over the next four years," the person

said, would be "de-enforcement."

Musk, the source said, could also push for favorable

regulation of autonomous vehicles and robotaxis that Tesla

plans. For his new artificial intelligence startup xAI, Musk

could shape nascent rules or a new agency, the person said.

Musk said last month that he expects to roll out driverless

Teslas in California and Texas by next year and start production

in 2026 on a fully autonomous "Cybercab" with no steering wheel

or pedals. Tesla would need a waiver from NHTSA to produce such

a vehicle.

There are no nationwide regulations governing how autonomous

vehicles can be deployed. That means operators have to deal with

different regulations in each state. Musk bemoaned the

challenges of the state-by-state regulatory landscape in a Tesla

earnings call last month and advocated for one federal approval

process.

Brian Mulberry, client portfolio manager at Zacks Investment

Management, a Tesla investor, said a streamlined, uniform set of

autonomous-driving regulations may provide Tesla the biggest

boost of any policy Musk might influence. A "slimmer, trimmer

federal Department of Transportation that gives common-sense

guidelines" would give Tesla "room to prove their case" for the

technology's safety, he said.

Despite Musk's complaints of stifling bureaucracy, SpaceX

currently leads the world in government-financed rocket launches

and Tesla sells nearly two million heavily subsidized EVs

annually.

Tesla shares closed up about 15% on Wednesday.

At his brain-implant startup Neuralink, Musk has long

complained that the U.S. Food and Drug Administration approval

process has slowed the firm from implanting the device in

humans. Musk could use his rising clout in a Trump

administration to cut through some of the safety-related

approvals in that process, according to a source familiar with

the company's operations.

Musk has long expressed frustration about the FDA's

pace. Some Neuralink employees are considering the prospect that

Musk, if he becomes Trump's "efficiency" chief, could get FDA

officials he deems inefficient fired, said a person familiar

with the matter.

GROWING POWER

Musk's designs on setting up a lax regulatory environment

come as his companies already face fewer regulatory requirements

and softer enforcement of current federal rules, according to

the six Musk company sources familiar with his regulatory

dealings and political strategy. Some federal agencies already

struggle to muster the political will to go after Musk companies

for alleged policy violations or safety issues, they said, in

part because Musk is the dominant player in highly-regulated and

politicized industries such as electric cars and rockets.

NASA, for instance, has relied on SpaceX's know-how in

missions such as the expected rescue of Boeing's Starliner

astronauts who are still stranded in space.

NASA and other agencies often try to avoid alienating the

company, said a federal official who is familiar with the

company's government interactions and spoke on condition of

anonymity. "NASA needs SpaceX more than SpaceX needs NASA," the

official said.

NASA has invested more than $15 billion in SpaceX. SpaceX is

also separately developing a network of hundreds of spy

satellites with a U.S. intelligence agency, Reuters has

reported.

A Reuters investigation last year documented at least 600

worker injuries at SpaceX facilities nationwide and found that

Musk's rocket company disregarded safety regulations and

standard practices. Worker injury rates at SpaceX facilities

also continued to exceed an industry average last year,

according to a Reuters review of safety data.

Neither NASA nor OSHA, which regulates worker safety, has

taken any significant enforcement action against SpaceX over

worker injuries and related reporting violations. NASA declined

to comment on Musk's potential influence after Trump's election.

Musk has nonetheless excoriated the government for trying to

enforce the rules even as his company has moved faster than

competitors. In an interview before the election, he described

federal enforcement as overly harsh and said he aimed to get rid

of "insane" regulations.

"Eventually, you just can't get anything done," said Musk

during an appearance at the All-in Summit, a gathering

affiliated with a tech podcast by the same name.

However, the U.S. government does not regulate the safety of

participants in private space flights in orbit due to a

temporary congressionally imposed ban on the agency's oversight,

to encourage innovation in the industry. A Trump administration,

influenced by Musk, is expected to push for softer regulations

on this front, according to four SpaceX sources familiar with

its regulatory strategy.

Musk and SpaceX see the company's dominance as evidence that

it can handle less oversight, the sources said, even as an

unfettered Musk could have unintended consequences for the

industry.

One former SpaceX official cautioned that taking a lax

regulatory attitude in a sector as dangerous as rocket-building

"could blow up in everyone's face and set back the industry for

a decade."