Shares of Tesla surged 8% on Friday, pushing the electric vehicle maker’s market capitalization past $1 trillion. The rally, which has seen Tesla's stock rise about 29% this week, follows Donald Trump’s victory in the U.S. presidential election. Investors have grown optimistic that a return of Trump to the White House could benefit Tesla, given the close relationship between CEO Elon Musk and the former president. Musk has been a strong ally to Trump, contributing at least $130 million to pro-Trump campaign efforts.
Prior to the election results, Tesla's market cap stood at $807.1 billion as of Tuesday's close, and its stock was up about 1% for the year. After this week’s surge, Tesla is now up roughly 30% year-to-date.
Tesla joins a select group of tech giants now valued at over $1 trillion, including Nvidia, Apple, Microsoft, Alphabet, Amazon, and Meta (though all but Meta are valued at more than $2 trillion). Tesla first surpassed the $1 trillion mark in October 2021.
Wedbush Securities analyst Dan Ives believes that a potential Trump administration could mean fewer regulations for Tesla and other companies.
“Tesla has the scale and scope unmatched in the EV industry, and this could give Musk and Tesla a distinct competitive advantage in a non-EV subsidy environment,” Ives wrote in a note to clients. He added that higher China tariffs under Trump could also limit competition from lower-cost Chinese EV makers like BYD and Nio, potentially keeping them from flooding the U.S. market in the years ahead.
Donald Trump has previously suggested he may reduce or eliminate the federal $7,500 electric vehicle tax credit, a key incentive that has historically boosted sales of Tesla vehicles.
In its most recent earnings report, Tesla posted revenue of $25.18 billion and net income of $2.17 billion for the third quarter. CEO Elon Musk, during the earnings call, projected that "vehicle growth" could reach 20% to 30% next year, driven by the introduction of "lower-cost vehicles" and advancements in autonomous driving technology.
Tesla has been working on developing self-driving vehicle technology for over a decade, though its key competitor in the U.S., Alphabet’s Waymo, has made significant progress, already operating commercial robotaxi services in multiple cities.
During the third-quarter call, Musk expressed his intention to use his influence with a potential Trump-Vance administration to push for a federal approval process for autonomous vehicles. Currently, approval is granted at the state level, which Musk views as a regulatory obstacle Tesla will need to navigate once it rolls out fully autonomous driving systems.