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Tesla shares surged 12% in early trading Wednesday following Donald Trump’s victory in the U.S. presidential election, as investors anticipated potential advantages for Tesla and its CEO Elon Musk, a major Trump backer.
After being projected as the winner over Democrat Kamala Harris, Trump’s return to the White House has fueled optimism among Tesla investors, who see Musk’s close ties with the president as a strategic edge. Last month, Musk donated $75 million to America PAC, a super PAC he founded to support Trump’s campaign and promote GOP candidates.
The Tesla and SpaceX CEO has publicly backed Trump, even pledging at an October rally in Madison Square Garden to help cut $2 trillion from the federal budget. Trump, in turn, has promised to name Musk to lead a government efficiency commission tasked with cutting waste and streamlining federal spending.
“Your money is being wasted, and the Department of Government Efficiency is gonna fix that,” Musk told the crowd, adding, “We’re going to get the government off your back and out of your pocketbook.”
Despite Trump’s past skepticism toward clean energy, analysts believe a Tesla-backed government efficiency role could be a boon for Musk’s company. “We see a Trump presidency as potentially challenging for EV incentives overall, but a positive for Tesla given Musk’s relationship with Trump,” said Wedbush Securities analyst Dan Ives. Ives noted that Tesla’s scale and market dominance could allow it to thrive without subsidies and potentially fend off Chinese EV competitors as Trump considers higher tariffs on imported vehicles.
Tesla shares, which have underperformed this year, ended Tuesday’s session with a 3.5% gain, breaking a six-day losing streak. Despite some headwinds, the stock’s strong response to Trump’s win underscores the market’s confidence in Musk’s influence under the new administration.
[Information sourced from CNBC]
