Elon Musk recently appeared on stage alongside former President Donald Trump at a rally in New York, which sparked a surge in Tesla’s stock price. Following Trump’s victory in the U.S. presidential election, Tesla’s market cap surpassed $1 trillion, with shares rising over 9% in afternoon trading.
Investors have shown optimism regarding the potential benefits Tesla could reap from Trump’s return to the White House, given Musk’s support for the former president during his campaign. Musk had contributed a significant amount, approximately $130 million, to a pro-Trump campaign effort, further solidifying their alliance.
Prior to the recent rally, Tesla had a market cap of $807.1 billion, with shares up only 1% for the year. However, the stock has seen a significant increase of approximately 27% this week alone, bringing the year-to-date increase to about 29%. The surge in Tesla’s market value now places it among other tech giants like Nvidia, Apple, Microsoft, Alphabet, Amazon, and Meta, with market caps exceeding $1 trillion.
Analysts, such as Dan Ives from Wedbush Securities, have suggested that a Trump administration could mean less regulation for Tesla and other companies. This could potentially give Tesla a competitive edge in the electric vehicle industry, especially in a scenario where EV subsidies are reduced and Chinese EV manufacturers face higher tariffs.
In the most recent earnings report, Tesla disclosed revenue of $25.18 billion and net income of $2.17 billion in the third quarter. Musk expressed optimism during the earnings call, projecting a growth rate of 20% to 30% in vehicle production for the upcoming year, driven by more affordable vehicles and advancements in autonomous driving technology.
Despite Tesla’s efforts in developing autonomous vehicle technology over the past decade, competitors like Waymo, owned by Alphabet, have made significant progress and are already operating commercial robotaxi services in various cities. Musk aims to work with a potential Trump-Vance administration to establish a federal approval process for autonomous vehicles, which currently face regulatory hurdles at the state level.
Overall, Tesla’s achievement of a $1 trillion market cap post-Trump victory signals a promising outlook for the company in the evolving landscape of electric vehicles and autonomous driving technology. The alliance between Musk and Trump could potentially pave the way for further advancements and opportunities in the future.
