Tesla’s market capitalization indicator on Friday, November 8, breached the $1 trillion mark amid a sharp increase in the value of the company’s shares, which is due to the fact that its chief executive officer Elon Musk supported Donald Trump, who became the winner of the United States presidential election.
According to media reports, there is currently an opinion circulating among investors that the mentioned firm and other brands of Mr. Musk will be in an advantageous position in the context of relations with the administration of the US president elected this week, whose inauguration will take place in January 2025.
Tesla shares rose more than 6% on Friday, reaching $315.56 per equity, which is a more than two-year high. It is worth noting that last Thursday, November 7, the corresponding indicator increased by 19.3% by the close of trading. For the first time in more than two years, the electric vehicle manufacturer’s market capitalization exceeded $1 trillion.
Currently, according to media reports, there is also a circulating opinion that Elon Musk will be able to make progress as part of efforts to form a favorable regulatory regime for vehicles equipped with autonomous driving systems. There are also suggestions that he will get the US National Highway Traffic Safety Administration to hold off on potential enforcement actions involving the safety of Tesla’s current driver-assistance systems.
As for autonomous vehicles, it is worth noting that Tesla pays a lot of attention to the relevant sector. Elon Musk focused on this technology. The development of self-driving cars has become a higher priority for the company than plans to build an economical car worth less than $30,000. At the same time, the materialization of the project of the vehicles equipped with autonomous driving systems is facing difficulties. In this case, the problems associated with the development and approach to the regulation of advanced technology are implied. Tesla has faced what can be described as a delay in the commercialization of self-driving vehicles.
Garrett Nelson, senior equity analyst at CFRA Research, said Tesla and Elon Musk are perhaps the biggest winners from the election result. The expert also suggests that Donald Trump’s victory may speed up the process of regulatory approval of autonomous driving technology developed by the billionaire’s company.
At the same time, it is worth mentioning Mr. Trump’s statements that he may cut the federal $7,500 electric vehicle tax credit. The corresponding credits contributed to the growth of sales of Tesla cars. It is still unknown whether this decision will be made. However, Tesla will benefit from a combination of potential factors such as loosening regulations and increasing tariffs on electric vehicles imported from China. Currently, the prevailing opinion among experts is that Donald Trump will decide to increase tariffs on the mentioned products from an Asian country.
It is worth noting that at the end of October, the value of Tesla shares showed a sharp increase. The corresponding dynamic was recorded against the background of a growth in the company’s quarterly profit margin. Sales of highly profitable Full Self Driving driver assistance software contributed to this result. Tesla’s revenue for the third quarter of 2024 was fixed at $25.18 billion. This indicator showed an increase which amounted to 8% compared to the result for the same period last year. The electric vehicle manufacturer’s net income for the third quarter of 2024 was fixed at $2.17 billion. A year earlier, this figure was $1.85 billion.
Elon Musk expects vehicle sales to grow by 20-30% next year. According to him, factors such as lower prices for vehicles and the advent of autonomy will contribute to the materialization of the corresponding forecast.
Tesla has been developing self-driving technology for more than a decade. Its main US competitor, which is Waymo, part of Alphabet’s ownership structure, has pulled ahead. This company already provides robotaxi services to customers in several cities.
As we have reported earlier, SEC Seeks to Sanction Elon Musk.
