Investors showed optimism on Wednesday as Tesla’s stock surged, anticipating that both the electric vehicle manufacturer and its CEO, Elon Musk, would prosper with Donald Trump’s re-election to the White House.
Tesla is poised to experience considerable benefits during a Trump presidency as the reduction of subsidies for alternative energy and electric vehicles poses a major challenge to smaller rivals. The potential implementation of extensive tariffs on Chinese imports by Trump reduces the likelihood of Chinese electric vehicles being widely distributed in the U.S. in the near future.
Dan Ives, an analyst at Wedbush, expressed in a message to investors that Tesla possesses an unparalleled scale and reach. This unique position could provide Elon Musk and Tesla with a significant edge in a scenario without electric vehicle subsidies. Additionally, the potential imposition of increased tariffs on China might further deter less expensive Chinese electric vehicle competitors.
On Wednesday, Tesla’s stocks surged by 14.8%, contrasting with the decline in shares of competing electric vehicle manufacturers. Shanghai-based Nio witnessed a 5.3% drop, while Rivian, known for its electric trucks, experienced an 8.3% decrease in its shares. Additionally, Lucid Group saw a 5.3% decline in its stock value.
As of mid-2024, Tesla holds a commanding market share of 48.9% in the U.S. electric vehicle sales, as reported by the U.S. Energy Information Administration.
The Inflation Reduction Act of 2022, enacted by President Joe Biden, incorporates subsidies for clean energy. These subsidies encompass tax incentives for manufacturers and consumers of electric vehicles.
The Inflation Reduction Act, enacted by President Joe Biden in 2022, comprises subsidies aimed at promoting clean energy. These incentives encompass tax breaks for manufacturers and tax benefits for individuals purchasing electric vehicles.
[Rephrased Content]: Musk emerged as a significant financial supporter of Trump, allocating a minimum of $119 million to rally Trump’s followers behind the GOP candidate. Additionally, he committed to donating $1 million daily to individuals endorsing a petition for his PAC.
Throughout the year, Tesla faced challenges with a decline in sales and profits during the initial six months. However, the company managed to achieve a 17.3% increase in profit during the third quarter.
An inquiry was launched by the United States regarding the “Full Self-Driving” technology of a company due to incidents of accidents occurring in conditions with poor visibility, leading to the tragic death of a pedestrian. The investigation encompasses around 2.4 million Tesla vehicles manufactured between 2016 and 2024.
Last month, the unveiling of Tesla’s highly anticipated robotaxi at a Hollywood studio led investors to drive down the company’s shares. The event highlighted Tesla’s perceived lack of significant advancement in autonomous vehicles compared to other companies that have been making remarkable strides in the field.
Nine years have passed since Tesla introduced its software named “Full Self-Driving” for sale; however, concerns regarding its dependability persist.
The stock has increased by 16.1% since the beginning of the year, following two consecutive days of gains.
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