The Tesla stock They rise in the first operations of the day after Donald Trump’s victory in the US elections was confirmed and investors bet that this victory would benefit the main sponsor and CEO of the car manufacturer, Elon Musk.
Tesla shares are up more than 15% in pre-market trading. According to NBC News’ count, the former president gained a considerable lead over Vice President Kamala Harris in Electoral College votes.
Last month, Musk donated nearly $75 million to America PAC, the super political action committee he established earlier this year to support the Republican candidate.
Trump’s promises
Trump promised to name Musk as the head of a government efficiency commission, if elected. During his speech at Trump’s Madison Square Garden rally in late October, the SpaceX owner said he could cut $2 trillion from the federal budget in that role.
“Your money is being wasted, and the government efficiency department is going to fix that,” he said at the rally. “We are going to take the government off your shoulders and out of your pocket.” Through Tuesday’s close, shares have significantly underperformed the broader market this year, up about 1.2%, compared with the S&P 500’s 21.2% gain so far this year. .
In Tuesday’s regular session, Tesla advanced 3.5%, breaking a six-day losing streak. This move comes even though Trump has been seen as unfavorable to clean energy stocks, a group that may include electric vehicle makers like Tesla.
“Definitely, the Democratic Party lost. He loses not only the Presidency but also key States. Lose the Senate, lose the House, which appears to be, so far, a major sweep by the Republicans in both Houses, in the Senate and the Presidency. Trump emerges as the big winner, he is going to have a friendly Congress for his reforms,” said Jorge Ángel Harker, International Markets Analyst at Adcap Financial Group.
And he added that “The other loser is China. Trump promised an increase in tariffs for trade with China, so we are going to have a resurgence of the trade war.”
“We believe a Trump presidency would be overall negative for the EV industry as tax incentives and rebates for EVs are likely to be withdrawn; however, for Tesla, we see this as a big positive,” he wrote Dan Ives, CEO of Wedbush Securities, in a note to clients.
“Tesla has unmatched scale and reach in the electric vehicle industry, and this dynamic could give Musk and Tesla a clear competitive advantage in an environment without subsidies for electric vehicles, plus higher tariffs on China that would continue to drive away buyers.” Chinese manufacturers of cheaper electric vehicles (such as BYD, Nio, etc.) will flood the US market in the coming years,” he added.
Source: Ambito
