Tesla's Stock Skyrockets 14% as Trump Win Sets Stage for Musk's Bold EV Strategy
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Following Donald Trump's election win, Tesla (NASDAQ:TSLA) stock surged 14% Wednesday, preparing the ground for a second presidential run. Strategically, CEO Elon Musk, who has backed Trump in the last months of the campaign, foresees a beneficial regulatory environment for Tesla, analysts say.
Should Trump cut subsidies on alternative energy and electric vehicles (EVs), it would be a possible setback for the larger EV sector but one that could help Tesla's dominant position, thus widening their market advantage. Shares of competing EV companies dropped significantly following the election news; Rivian (NASDAQ:RIVN) dropped 8%, Lucid Group (NASDAQ:LCID) dropped 4%, and China-based Nio (NIO) dropped 5.3%.
"Tesla has the scale and scope that is unparalleled," noted Wedbush researcher Dan Ives in a note. "This dynamic could provide Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled with probably higher China tariffs that would continue to push away cheaper Chinese EV players." Apart from suggesting 10% to 20% tariffs on imported foreign goods, a policy that would affect imports of Chinese EVs, the Trump government is expected to turn the emphasis away from green energy subsidies.
This article first appeared on GuruFocus.