Latest Trump News Boosts Tesla Shares 7%

On November 18, 2024By Littum

Upper line

Tesla shares rose Monday after a report indicating that President-elect Donald Trump will maintain regulations on self-driving cars, sending a positive signal about how Trump will oversee the electric car giant led by the world’s richest man and close Trump ally, Elon Musk — just days after Tesla – the stock fell into place. to Trump’s plan to kill pro-business policies.

President-elect Donald Trump, left, and Elon Musk speak at a UFC event Saturday.

Zuffa LLC

Key facts

Shares of Tesla rose 7% to $344 by 10 a.m. EST, trading within 5% of a 2.5-year high of nearly $360 set last Monday as investors poured into the stock after the U.S. election.

The stock’s rally follows on a Sunday afternoon report from Bloomberg that Trump’s transition team will push the transportation department to develop a regulatory framework for driverless vehicles, citing anonymous sources, a move that could help bring Tesla’s recently unveiled Cybercab to U.S. roads by Musk’s 2026 goal.

The report suggests a major shift in attitude from the current Transportation Department, whose sub-agency the National Highway Traffic Safety Administration is investigating the safety of Tesla’s semi-autonomous driving programs due to the system’s performance in low visibility conditions.

That would be a central pivot like Musk narrator shareholders to only invest in the company if they believe Tesla can solve autonomous driving.

Trump could “potentially put an end to NHTSA investigations against Tesla,” Bernstein analysts led by Toni Sacconaghi Jr. noted. in a Monday note to customers, hovering several roads for the president-elect to help get Tesla’s driverless cars on the road.

These include a congressional amendment to the Vehicle Safety Act to increase the pace of road testing of the vehicles and to use legislative pressure to “encourage states to provide an easier path toward more widespread testing for Tesla (Full Self-Driving) or face lowered highway distributions or other fines.”

How else will Trump affect Tesla?

The reported plan to prioritize self-driving approval is the latest indication of how the Trump regime will deal with the heavily regulated Tesla. Trump administration plans to end $7,500 federal tax credit for electric car buyers Reuters reported last week, briefly pushed Tesla’s stock into a 10% correction due to the potential for lower demand for its cars, though analysts widely see the potential tax credit change as more damaging to other EV makers than it is to Tesla. The company could also be heavily affected by the hawkish China trade policy supported by Trump, as about 30% of Tesla’s car sales come from China, although some experts believe that Musk, who has advocates for against tariffs, may have a strong voice in shaping trade policy more friendly to Tesla, potentially via “carve outs”. The Bernstein Group identified several other areas where the Trump administration could impact Tesla, including an “uncanny but still plausible” scenario in which Trump orders the federal government to replace close to 700,000 vehicles with Teslas.

Crucial quote

“I’m for electric cars, I have to be because Elon backed me very strongly,” Trump, previous a public skeptic of autonomous and electric vehicles, said in August.

Forbes valuation

Already the world’s richest person, Musk has become more than $50 billion richer since the election as Tesla shares surged, largely thanks to the prospect of more favorable regulation. His net worth of $315 billion, which increased by $11 billion on Monday, is more than $85 billion higher than anyone else’s.

Key background

Musk is also the owner of social media platform X and the CEO and largest shareholder of space agency SpaceX and generative artificial intelligence startup xAI. “Trump’s victory could also potentially prove even more positive for Elon Musk’s other businesses” than Tesla, as those firms could also benefit from friendlier regulation, Sacconaghi theorized. Musk, who donated well over $100 million to Trump’s reelection efforts, has proven inseparable from the president-elect this month, weighing in publicly and privately on the transition process. The billionaire was tapped last week to lead a commission focused on cost savings in the federal government, the Department of Government Efficiency.