Tesla’s stock price has been on a bit of a rally lately. The price is currently up almost 70 percent since election day, when Donald Trump became president-elect for a second time. This has boosted Tesla’s market capitalization from $807 billion up to $1.3 trillion.
Elon Musk and Donald Trump appear closer than ever now. Musk was seen cozying up to the former president on the campaign trail, and a week after the election, Trump announced that Elon Musk and former Republican presidential candidate Vivek Ramaswamy would head up a new program called the Department of Government Efficiency (DOGE). Musk’s deepening relationship with Trump and Tesla’s rising stock price does not appear to be merely coincidental, even if Trump is no EV warrior.
Trump And EVs
The incoming administration has no great love for electric vehicles, and especially not for government programs that support them. Trump’s transition team has plans to roll back emissions standards, remove EV tax credits, and enact tariffs on EV supply chain imports — all moves that would theoretically affect Tesla. Back in October, Tesla unveiled its robotaxi, called the Cybercab. Trump doesn’t appear to have any great fondness for autonomous vehicles, either, so it’s questionable whether Musk’s relationship with him will be any help in that endeavor, either.
Shareholders’ willingness to bet on Tesla continues, nonetheless. According to a report from Automotive News, a number of analysts believe this is because of Elon Musk’s ties to Trump rather than the merits of the EV manufacturer.
Investors Are Betting On Intangibles
It’s not necessarily that investors are betting on Tesla as a company, but rather as a symbol of Elon Musk, the man with ties to the next president. “The problem is that there’s only one public market play on Musk, and its symbol is TSLA,” Nicholas Colas, co-founder of DataTrek Research, told Automotive News.
And, even if Trump is ultimately unfriendly to the subjects of Tesla’s business — electric and autonomous cars — many believe Tesla’s competitors have the most to lose. Musk even posted on X, “Take away the subsidies. It will only help Tesla.”
Trump is also generally unfriendly to regulations that could get in Tesla’s way, and being in the president’s inner circle could pay off in unexpected ways. “People who bet against Musk and Tesla have consistently been proven wrong,” Cole Wilcox, portfolio manager at Longboard Asset Management, told Automotive News. “There is nothing in his way that can prevent him from executing his visions now.”
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