Tesla Jumps as Musk Seen Winning Under Trump Presidency

KEY TAKEAWAYS

• Shares of Tesla jumped 14% Wednesday on investor bets that the electric vehicle (EV) maker run by Elon Musk will be a major beneficiary of Donald Trump’s return to the presidency.
• Tesla CEO Musk, an outspoken Trump backer, is expected to become a prominent adviser to the president and has been constantly tweeting his support.
• Tesla's prospects under a Trump presidency are less clear-cut given Trump's pro-tariff stance that may hit China sales and less green-focused initiatives.
• Ford and GM shares are also rising Wednesday.

Shares of Tesla (TSLA) jumped 14% Wednesday on investor bets that the electric vehicle (EV) maker run by Elon Musk will be a major beneficiary of Donald Trump’s return to the presidency.

Tesla CEO Musk, an outspoken Trump backer, is expected to become a prominent adviser to the president. The billionaire messaged constantly on his social media network X in support of the president in the run-up to the vote.

Tesla's Fortunes Likely Mixed Under Trump Presidency

Tesla's prospects under a Trump presidency are less clear cut, however.

Trump isn’t a backer of clean energy, while Tesla has benefited from the Inflation Reduction Act of 2022, signed by President Joe Biden. Tesla also gained from 100% tariffs on Chinese EVs imposed by Biden that protected the EV maker from an onslaught of cars from the Asian nation—which is also a major market for the company.

Wedbush analyst Dan Ives, who has an “outperform” rating on the EV maker’s shares, said Sunday that the possibility of a trade war with China could weigh on the company. Ives did, however, note that a Trump presidency could mark a more welcoming environment for the company’s autonomy initiatives.

EV Rivals Fall, GM, Ford Rise

Meanwhile, pure EV makers were losing ground while more traditional automakers were rising.

Shares in EV maker Rivian Automotive (RIVN) fell 7% and those of Polestar's (PSNY) tumbled 9%.

In contrast, General Motors (GM) and Ford Motor Company (F) shares are up 1.7% and 3.3%, respectively. Both are major employers in the U.S. and could gain from increased tariffs imposed on China. However, the two also produce cars for export from the Asian country.

UPDATE—Nov. 6, 2024: This article has been updated to include fresh stock prices.

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