Tesla has rejoined the prestigious $1 trillion market cap club on November 8, 2024, following a significant stock rally after Donald Trump’s re-election as President of the United States earlier in the week. Tesla’s shares surged over 23% in the three days following Trump’s victory, marking a return to growth after a relatively stagnant year.
On Friday the stock quickly smashed through the $300 barrier, which is butted up against for most of the day on Thursday. At the time of publication, the stock is currently trading at around $322 per share. The last time it was at this price point was early 2022. This momentum has now pushed Tesla’s market capitalization above $1,000,000,000,000, a feat it last achieved in late 2022.
The elevation of Tesla’s valuation to $1 trillion reflects investor optimism about the company’s future after Elon Musk emerged as one of Trump’s most visible supporters during the campaign, endorsing Trump and contributing substantial funds to his campaign efforts. In its recent earnings report, Tesla announced $25.18 billion in revenue for Q3 2024, alongside a 20-30% projected growth in vehicle deliveries for the coming year.
This alignment with Trump’s administration has not only fueled Tesla’s stock rise but also increased Musk’s influence in potentially shaping US policy on EVs and technology. A critical area where Tesla might benefit is in the regulation of autonomous vehicles. Musk has voiced his support for a unified federal regulatory framework, as the current state-by-state approval system is seen as a significant barrier.
With Trump’s victory, Musk’s vision for streamlined, national regulations could become a reality, potentially removing bureaucratic delays that have previously hampered Tesla’s Full Self-Driving (FSD) program.
However, Trump’s potential rollback of green subsidies, such as the $7,500 EV tax credit initiated under the Biden administration, could have mixed implications. Tesla has largely benefited from this tax credit, but Musk has advocated for its removal, believing it would increase Tesla’s competitive edge by pressuring other automakers to innovate without government assistance.
