Shares of Tesla Motors rallied 9 percent to end the trading week, pushing the company’s value to $1 trillion for the first time since April 2022.
The electric vehicle (EV) maker’s stock reached $325 on the Nasdaq Composite Index during the Nov. 8 trading session. Before Election Day, Tesla maintained a market cap of about $807 billion, and shares were up just 1 percent for the year.
The company rejoins the growing club of trillion-dollar companies, including Amazon, Alphabet, Apple, Meta, Microsoft, and Nvidia. Tesla first ventured past the $1 trillion threshold in October 2021.
Because of the stock’s significant gains, Elon Musk’s net worth surged to $300 billion for the first time in more than two years.
Tesla’s stock rocketed by 33 percent this week, adding about $200 billion in value as investors cheered President-elect Donald Trump’s victory in the presidential election. Since billionaire Elon Musk was a critical ally for Trump during the 2024 campaign, traders are betting that a second term for the Republican could benefit the automaker.
Musk’s pro-Trump America PAC received about $118 million from the billionaire.
Musk appeared alongside the president-elect at several rallies in the final days of the presidential election, hosted a tour across the key battleground state of Pennsylvania, and was at Trump’s Mar-a-Lago estate on election night.
Trump has provided mixed views on electric automobiles.
“I’m for electric cars. I have to be because Elon endorsed me very strongly,” Trump told a crowd of supporters in August at a rally in Atlanta.
Trump later revealed that he may consider ending a $7,500 tax credit for EV purchases.
In March, Trump stated that the U.S. automotive industry could suffer a “bloodbath” partly because of the current administration’s green energy policies.
President Joe Biden’s administration has introduced EV incentives and EV-related grants to accelerate the transition from gas-powered automobiles to new energy vehicles.
Still, Tesla could benefit under a Trump administration and provide the company with a competitive advantage, according to Wedbush Securities analyst Dan Ives.
“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 with likely higher China tariffs that would continue to push away cheaper Chinese EV players,” Ives said in a note.
Seth Goldstein, an analyst at Morningstar Research, said that any changes to EV subsidies could affect domestic sales of electric cars.
The stock has trended upward in the second half following a lackluster first half. Shares soared last month after the company’s upbeat third-quarter earnings report.
Tesla topped Wall Street forecasts in the third quarter and registered better-than-expected profits. In the earnings call, Musk said that his “best guess” is that vehicle growth will reach 20 to 30 percent in 2025 amid “lower cost vehicles” and the “advent of autonomy.”
Musk also said that he would help speed up the federal approval process for autonomous vehicles.
Bank of America raised its target to “Buy” and forecasts a 17-percent upside to $350 from the previous estimate of $265.
The first half of 2024, Goldstein said, was “likely the bottom” for the company.
“In our view, the results signal that the first half of 2024 was likely the bottom for Tesla’s automotive gross profits, as we expect fourth-quarter results will also exceed 20 [percent],” Goldstein said in an Oct. 24 note.
