Tesla Inc. (TSLA) shares skyrocketed over 13% in pre-market trading on Wednesday, riding a wave of optimism surrounding a potential Donald Trump victory in the US presidential election. The surge in Tesla’s stock price is directly linked to Elon Musk’s ardent support for Trump and the prospect of a Trump administration implementing policies favorable to Tesla.
According to The New York Times, Trump currently holds a commanding lead in the electoral college, with over 95% chance of victory. This news has sent shockwaves through the markets, with Tesla investors seemingly betting on a Trump win.
Musk has been a vocal supporter of Trump throughout the campaign, openly campaigning for the former President both offline and online. He even actively campaigned for Trump in the pivotal swing state of Pennsylvania in October. Trump, in turn, has expressed his admiration for Musk, publicly stating his intention to create a government efficiency commission headed by Musk if he wins the election. The commission would be tasked with conducting a comprehensive financial and performance audit of the federal government and recommending reforms, a proposal Trump first unveiled in September.
Dan Ives, a Wedbush analyst, believes that a Trump victory would be particularly beneficial for Tesla and Musk. While Ives predicts a negative impact on the broader electric vehicle (EV) industry due to potential withdrawal of EV rebates and tax incentives, he believes a Trump win would be a significant positive for Tesla, bolstering its market share and pricing advantage. Ives estimates that a Trump victory could inject an additional $40-$50 into Tesla’s stock price.
The positive sentiment surrounding a potential Trump win is not limited to US markets. Tesla’s shares listed on the Frankfurt Stock Exchange have also surged, rising over 14.5%.
This surge in Tesla’s stock price highlights the influence of political factors on market sentiment. While the outcome of the election remains uncertain, it is clear that investors are closely watching the race and adjusting their portfolios accordingly. The coming days will be crucial for Tesla, with the potential for significant gains or losses depending on the final results of the election.
