Elon Musk emerged as the big winner of Tuesday’s election and Trump’s victory, with his net worth soaring by $26 billion on the first day after Trump’s triumph. Musk’s net worth now stands at $290 billion, thanks to his connections with Trump — and it continues to climb strongly.
Tesla shares skyrocketed on Wednesday as investors bet that the electric vehicle maker and its CEO, Elon Musk, will benefit from Donald Trump’s return to the White House. Tesla stands to gain significantly under a Trump administration, with potential reductions in subsidies for alternative energy and electric vehicles potentially harming smaller competitors. Trump’s plans for extensive tariffs on Chinese imports also make it unlikely that Chinese EVs will enter the U.S. market in large numbers anytime soon.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled with likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Tesla shares surged 14.8% on Wednesday, while shares of rival electric vehicle makers declined. Shanghai-based Nio fell 5.3%, electric truck maker Rivian dropped 8.3%, and Lucid Group decreased by 5.3%.
Tesla dominates electric vehicle sales in the U.S., holding a 48.9% market share through the middle of 2024, according to the U.S. Energy Information Administration.
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. The act includes tax credits for EV manufacturing and consumer purchases.
Musk was one of Trump’s biggest donors, spending at least $119 million to mobilize support for the Republican nominee. He also pledged to donate $1 million a day to voters who signed a petition for his political action committee.
It’s been a mixed year for Tesla, with sales and profit declining in the first half of the year. However, profit rose by 17.3% in the third quarter.
The U.S. government recently opened an investigation into Tesla’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one incident that killed a pedestrian. The investigation covers approximately 2.4 million Teslas from the 2016 to 2024 model years.
Investors sent Tesla shares tumbling last month after the company unveiled its long-awaited robotaxi at a Hollywood studio, amid concerns over slow progress on autonomous vehicles. Tesla began selling its “Full Self-Driving” software nine years ago, but doubts about its reliability persist.
The stock is now showing a 16.1% gain for the year after two days of recent rises.
