Elon Musk donated over $119 million to a pro-Trump political group and actively supported the former president during the crucial final phase of his campaign against Kamala Harris.
Musk’s business interests ranging from Tesla electric vehicles to SpaceX rockets and Neuralink brain chips are heavily influenced by government regulation, subsidies, and policy. A Trump victory is expected to benefit Musk’s ventures by potentially easing regulations and securing favorable policies for his companies.
Share Price Movement
During Wednesday’s trading session, the share price of Tesla Inc surged 14.75 percent to $288.53 per share, from its previous close of $251.44 per share. Over the past six months, the stock has provided a remarkable return of over 60 percent.
Benefit for Tesla
Tesla shares surged following Donald Trump’s victory in the U.S. presidential election, as traders became more optimistic about the company’s future. The strong relationship between Trump and Tesla CEO Elon Musk has driven this optimism.
Trump’s win could lead to fewer regulations on self-driving cars, which would help Tesla advance projects like Cybercabs and Robovans. While Democrats have traditionally supported green technologies, Musk’s increasing involvement in politics could make a difference. He may even take on a role to lead the new Department of Government Efficiency, or DOGE, named after his favorite Dogecoin. Musk stated, “I’m ready to serve America if the opportunity arises. No pay, no title, no recognition needed.”
Chinese Competition
Tesla stands to benefit under a Trump administration, with reduced subsidies for electric vehicles likely harming smaller competitors. Trump’s proposed tariffs on Chinese imports would limit the sale of Chinese-made EVs in the U.S., strengthening Tesla’s market dominance. Tesla currently holds a 48.9 percent share of U.S. EV sales as of mid-2024.
Benefit for SpaceX
A Trump victory in the upcoming elections could provide significant advantages for Elon Musk’s SpaceX, with the potential for more lenient regulations. Musk’s companies already enjoy reduced regulatory scrutiny, and federal agencies, particularly NASA, have heavily relied on SpaceX for missions like the rescue of Boeing’s Starliner astronauts.
With over $15 billion invested by NASA, SpaceX’s prominence could increase further under a Trump administration.
Financial Performance
In Q3 2024, Tesla generated $25.18 billion in revenue, marking an 8 percent rise compared to the previous year’s revenue of $23.35 billion, fueled by higher vehicle deliveries and energy services growth.
Net profit climbed to $2.17 billion, a 17 percent YoY increase, with adjusted earnings per share reaching $0.72. Although revenue missed expectations, strong profitability was supported by substantial carbon credit sales of $739 million.
Written by – Siddesh S Raskar
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