Tesla hits a $1 trillion market cap after the stock rallies 27% following Trump's election win
ANGELA WEISS / AFP
- Tesla on Friday reached a trillion-dollar market valuation for the first time since April 2022.
- Its stock surged 27% following Donald Trump's election win, boosting Elon Musk's net worth.
- Wedbush notes Tesla has a competitive advantage if Trump gets rid of electric-vehicle subsidies.
Tesla hit a $1 trillion market valuation for the first time since April 2022.
The stock surged as much as 7% on Friday to an intraday peak of $319.44, with shares soaring 27% since Donald Trump was declared the winner of the US presidential election.
Tesla CEO Elon Musk was a huge backer of Trump's campaign in its final few months, donating over $100 million to efforts to reelect him.
The massive gain in Tesla stock this week catapulted Musk to a net worth of about $300 billion, solidifying his position as the world's richest person, according to Bloomberg data.
The Wedbush analyst Dan Ives said Trump's win, while potentially negative for the broader electric-vehicle sector, could significantly benefit Tesla.
That's because while federal EV rebates and tax incentives are likely to be withdrawn during Trump's second term, Tesla is better suited than its competitors to navigate such a scenario.
"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 US market over the coming years," Ives said in a note this week.
Significant deregulation under Trump could also fast-track Tesla's Full Self-Driving platform to market. Tesla's premium valuation has largely hinged on its progress in delivering a fully autonomous vehicle, so investors would most likely cheer any progress on that front.
Shares of Tesla are up 26% this year, in line with gains of the S&P 500 and the Nasdaq 100.