Tesla’s stock price rose more than 6% in trading today, pushing the electric car maker’s market capitalization past $1 trillion. After Donald Trump’s victory in the US presidential election, the value of the automaker’s securities jumped by 27%.
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This was fueled by optimism among investors who expect Tesla CEO Elon Musk, one of Trump’s key allies during the election campaign, to benefit once the former US president returns to the White House. According to the source, Musk invested at least $130 million in Trump’s election campaign.
Tesla’s market value was $807.1 billion at the close of trading on Tuesday. Before the sharp jump that occurred after Trump’s election victory was announced, the company’s shares were growing at about 1% per year. However, this year the situation has changed, and as of now, Tesla’s stock price is up 27% this year.
With this, Tesla once again joins a group of tech companies valued at more than $1 trillion, including Nvidia, Apple, Microsoft, Alphabet, Amazon and Meta✴ Platforms. For the first time, Tesla’s capitalization level exceeded the $1 trillion mark in October 2021.
Wedbush Securities analyst Dan Ives said the incoming Trump administration could potentially ease regulation for Tesla and other tech companies. “Tesla has scale and scope unmatched in the EV industry. This dynamic could give Musk and Tesla a clear competitive advantage that does not involve subsidizing the production of electric vehicles, in the face of a likely increase in tariffs on China, which will push cheaper Chinese manufacturers (BYD, Nio, etc.) away from flooding the US market in the coming years,” Ives believes.
Trump previously did not rule out the possibility of maintaining the $7,500 federal tax credit for electric vehicles, which has historically contributed to Tesla’s sales growth. In the financial report for the third quarter, the manufacturer reported revenue of $25.18 billion and net profit of $2.17 billion. At the same time, Musk said that, in his opinion, the company’s auto sales growth next year will range from 20% to 30%, which will be facilitated by the “decrease in cost of cars” and the “advance of autonomy.”