Tesla shares rallied significantly during intraday trading Wednesday as Donald Trump's victory in the US presidential election sparked enthusiasm about potential benefits for the electric vehicle manufacturer with Trump's anticipated return to the White House. The stock experienced an increase of approximately 13% during Wednesday's trading session. Trump triumphed over Kamala Harris, the vice president, and the Democratic nominee in Tuesday's election, as Republicans also secured a Senate majority.
Vote counts for the House were still ongoing as of Wednesday morning. Elon Musk, Tesla's Chief Executive and a prominent supporter of Trump, shared an image on the social media platform X featuring a rocket, accompanied by a caption stating that "the future is gonna be fantastic." In September, Trump had suggested he would create a government efficiency commission, with Musk as its potential head. According to Oppenheimer, Tesla’s stock is poised to be a leading choice should Republicans achieve a clean sweep in the elections. Leading up to election day, Tesla’s share price had remained relatively stable, beginning the year slightly below $250 and concluding at $251.44 on Tuesday. However, Wedbush Securities expressed a contrasting viewpoint in a note on Sunday, stating, "We believe a Trump presidency would be an overall negative for the EV industry" due to potential rollbacks on electric vehicle rebates and tax incentives.
"Nonetheless, for Tesla, we regard this as a potential positive despite some caveats." Additionally, Oppenheimer identified Republic Services and Caterpillar as top picks alongside Tesla, predicting a reduced governmental backing for EVs, advantages from lower corporate taxes, and increased reshoring opportunities during a Republican tenure. The firm anticipates that tax credits for manufacturing will remain "largely intact" for companies like Tesla on projects with committed investment.
However, a reduction in support for EV tax credits on initiatives without secured funds is foreseen. Current Price: 284.64, Change: +33.20, Percent Change: +13.20.