Tesla's stock value has surged significantly since the U.S. presidential election, reaching a market capitalization of approximately $1.3 trillion. Despite reporting weaker-than-expected financial results for the last quarter of 2024, the company's stock continued to rise, a trend unusual for most automakers. The increase reflects investor confidence in CEO Elon Musk long-term vision and potential regulatory advantages under the Trump administration.
Tesla's latest earnings report revealed declining revenue and profits, marking a rare setback in its financial performance. Additionally, the company reported its first annual drop in vehicle sales in over a decade as competition in the electric vehicle (EV) market intensifies. However, investors appear focused on Tesla's future prospects, particularly its advancements in autonomous driving technology and robotics.
The recent stock rally is partially driven by expectations that the Trump administration's policies will favor Tesla. President Donald Trump has appointed Musk to lead a new government office focused on reducing regulations, a move seen as potentially beneficial for Tesla's expansion plans. Trump's transportation secretary, Sean Duffy, has pledged to streamline federal self-driving regulations, which could accelerate Tesla's deployment of autonomous vehicles.
At the same time, some policy changes could pose challenges. The administration has proposed ending a $7,500 federal tax credit for electric vehicle buyers and lowering emission standards, potentially impacting Tesla's regulatory credit sales. In the last quarter of 2024, Tesla generated $692 million from these credits, contributing significantly to its financial stability.
The political activity of Musk has started to influence investors' attention. Public statements about European politics and his connections to Trump have generated differing reactions from the public. Investors maintain divided opinions about Trump-Musk support since some view this relationship as beneficial but many are concerned about potential backlash affecting business performance in European markets.
Market analysts maintain a positive outlook regarding Tesla's market value despite existing uncertainties. Experts believe Tesla will gain market value surpassing the total wealth of worldwide auto manufacturers while making a bid against top technology entities. Investors are paying attention to Tesla following its future expansion plans across artificial intelligence, robotics and EV technology.