Elon Musk's Big Gamble: Will Tesla Stock Plunge if Kamala Harris Wins the Election?

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At least in terms of dollars, there may be nobody with more on the line in the upcoming election than Tesla (NASDAQ: TSLA) CEO Elon Musk.

Out of any well-known business leader, Musk has been the most visible advocate for former president Donald Trump, even appearing at his rallies, including Trump's "closing argument" rally last Sunday at New York City's Madison Square Garden.

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It's a bit ironic that Musk has chosen to align with Trump, as the former president has regularly derided electric vehicles and renewable energy, but Musk seems to prioritize the GOP's promise to cut regulations and believes Trump is more aligned with his views on other issues like "free speech." Musk was also reportedly stung by President Joe Biden's not inviting him to participate in a panel discussion on EVs near the start of Biden's administration. He has since drifted away from Democrats and toward Republicans.

Musk's big bet on the Trump campaign comes just as Tesla is ramping up its own bet on autonomy as the company introduced its autonomous "Cybercab" at an event earlier in October. The Tesla chief has essentially said that the future of his company depends on autonomy and that it's the best-positioned company to lead the transition to autonomous vehicles (AVs).

The Cybertruck driving on a track.
Image source: Tesla.

Tesla's big election risk

Tesla can't make the transition to autonomous vehicles without the help of the federal government and agencies like the National Highway Transportation Safety Agency (NHTSA), as well as state-level regulators, which also need to sign off on the new technology. Musk even expressed his desire for a federal mechanism to regulate AVs on Tesla's recent earnings call, rather than doing it at the state level. He aims to launch the Cybercab initially in Texas and California.

Naturally, safety is a top concern of both regulators and anyone on the road, and AV accidents have already delivered significant setbacks to companies like Uber Technologies and General Motors that have had aspirations of bringing AVs to market.

Currently, the NHTSA doesn't allow vehicles, like the Cybercab, on the road without driver controls like a steering wheel or pedals. When and if it does, that transition is likely to happen slowly. Tesla may be able to get an exemption to put 2,500 Cybercabs per year on the road, but that is still a far cry from Musk's vision of putting millions of these cars on the road each year.