Tesla Shares rose sharply on Wednesday as news flashed that Donald Trump would once again be returning to the White House, an outcome quite openly supported by Tesla’s CEO Elon Musk. The market opening saw the stock surging 14% more, which indicated investor confidence in Tesla under a possible Trump administration.
Analysts believe that Tesla will be better positioned to compete in a potential future where subsidies for electric vehicles are reduced, a development that Trump’s policies may threaten. The reduced EV subsidies may weaken smaller rivals in the EV market, where size and market share become even more dominant for Tesla.
According to analyst Dan Ives from Wedbush Securities, one example is Tesla with unparalleled scale, which might continue keeping it resilient without subsidies while Musk makes savvy expansion moves to increase the production capacity of Tesla. Regarding further impacts of proposed tariffs by Trump towards foreign goods especially from China, they are more likely to hit the smaller EV makers whose cars are imported than Tesla whose present base of production lies in the US.
The stock of competing EV manufacturers plummeted after the vote as investors feared that eventually, tariffs or subsidy alterations would affect the industry as well. Rivian declined by 8 percent; Lucid Group shed off 4 percent and China-based NIO fell by 5.3 percent.
Among the most public endorsements of Trump is Musk himself, who recently promised almost $75 million to America PAC, a super political action committee in support of the former president’s campaign. Trump also included, as part of his proposed appointees, to have Musk lead a government efficiency commission, a position where Musk promised to cut $2 trillion from federal spending.
Analysts believe that despite Trump’s earlier stance, which most believe is unfriendly to clean energy, Tesla will thrive in the subsidy-free environment and may outshine smaller competitors as trade policies tighten.
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