Tesla stock doubles from $142 in April to $286 following Trump’s victory
Nickie Louise
Posted On November 6, 2024
Tesla shares soared 13% on Wednesday after Donald Trump’s presidential election victory, as investors speculated that the win could benefit Elon Musk, Tesla’s CEO and one of Trump’s key supporters.
In a bold move that went against typical corporate stances, Musk backed Trump’s campaign with tens of millions in donations and organized a voter mobilization drive. This may have come as a surprise to some, especially given Peter Thiel’s famous advice: “Never bet against Elon Musk.”
Tesla’s stock performance has lagged the broader market this year, with a 14% increase compared to the S&P 500’s 23.4% gain. Yet on Tuesday, Tesla rebounded 3.5%, ending a six-day slump. The stock hit its yearly low in April, trading at around $142, but has since doubled to $286 as of today.
This rally comes despite Trump’s reputation as unfriendly toward clean energy initiatives, a category that includes electric vehicle makers like Tesla.
Wedbush Securities managing director Dan Ives wrote in a client note, “We believe a Trump presidency would be an overall negative for the EV industry as likely the EV rebates/tax incentives get pulled; however, for Tesla, we see this as a huge positive,” CNBC reported.
He added, “Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYD, Nio, etc.) from flooding the U.S. market over the coming years.”
Musk recently donated nearly $75 million to America PAC, a super PAC he established earlier this year to support Trump’s campaign.
Trump has proposed appointing Musk to head a government efficiency commission. Speaking at Trump’s Madison Square Garden rally in October, Musk pledged to help reduce federal spending by $2 trillion. “Your money is being wasted, and we’re going to change that,” Musk said at the rally. “We’ll get the government out of your wallet.”
With Trump now in office, Musk’s backing could mean a direct line to the White House, potentially influencing policies that benefit Tesla. However, it’s uncertain how Musk might prioritize Tesla over his other ventures, like SpaceX, a key government contractor, or xAI, his artificial intelligence startup that’s currently in talks to raise new funding from Nvidia.
