Tesla ($TSLA) shares experienced a significant spike on Wednesday as Donald Trump's success in the US presidential election ignited speculation about potential advantages for the electric vehicle manufacturer. The stock climbed approximately 13% during the trading session. Trump defeated Kamala Harris, the vice president and Democratic nominee, during the Tuesday election, while Republicans gained a majority in the Senate.
Counting for House votes continued through Wednesday morning. Elon Musk, Tesla's Chief Executive and a notable supporter of Trump, shared an image of a rocket on social media platform X, captioning it with 'the future is gonna be fantastic.' In September, Trump expressed intentions to create a government efficiency commission, considering Musk for the role as its chief. Oppenheimer expressed on Wednesday that Tesla’s stock would be a preferred choice in the scenario of a Republican sweep.
Despite Tesla shares having remained largely flat throughout the year until Election Day — starting below $250 and concluding at $251.44 on Tuesday — the current boost in prices reflects heightened optimism attributable to the election results. Contrarily, Wedbush Securities noted in a recent report their belief that a Trump presidency could pose challenges for the electric vehicle sector overall, particularly with potential reductions in electric vehicle rebates and tax incentives.
However, they acknowledged potential benefits for Tesla, albeit with some reservations. In their Wednesday analysis, Oppenheimer also identified Republic Services ($RSG) and Caterpillar ($CAT) among their leading picks in the event of a Republican victory—citing the expected decrease in government support for electric vehicles, advantages arising from reduced corporate tax rates, and the potential for reshoring. While Oppenheimer anticipates that manufacturing tax credits for firms like Tesla will remain 'largely intact' for ongoing projects with already committed capital, they also foresee the likelihood of diminished support for electric vehicle tax credits on new initiatives lacking confirmed financial commitments.
Price: 284.64, Change: +33.20, Percent Change: +13.20.