Tesla Stands to Make Significant Gains Under a Trump Administration

Tesla dominates sales of electric vehicles in the US with 48.9% in market share through the middle of 2024, according to the Energy Information Administration.

Electric vehicle maker Tesla (TSLA) saw its shares surge on Wednesday following Mr Trump’s victory in the 2024 presidential election, while shares of smaller rival EV makers fell sharply amid the threat of higher tariffs on foreign goods.

Tesla shares jumped more than 14.8 per cent in extended trading on Tuesday, while shares of Nio (NIO) fell 5.3 per cent, Rivian (RIVN) dropped 8.3 per cent and Lucid Group (LCID) fell 5.3 per cent.

Mr Trump has proposed tariffs of 10 to 20 per cent on foreign goods, which would also impact electric vehicle maker’s outside the US, especially in China, and shares of EV makers there slid as well in US markets.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors.

“This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Subsidies for clean energy are part of the Inflation Reduction Act, which was signed into law by Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Mr Musk was one of Mr Trump’s biggest donors, putting more than $70m of his own money into the presidential run and other Republican causes. He also pledged to give away a million dollars a day to voters signing a petition for his political action committee.

Meanwhile, the price of bitcoin hit a new high and crypto-related shares rallied as investors bet that Mr Trump’s victory will be a boon for cryptocurrencies.

Bitcoin jumped nearly 8 per cent in early trading, climbing above $75,000 and smashing its previous record set in March.

Other cryptocurrencies also soared, including ether, the world’s second most popular cryptocurrency after bitcoin, which rallied 8 per cent.

Another token, dogecoin, rocketed as much as 18 per cent. It is the favourite cryptocurrency of Mr Musk.

Mr Trump was previously a crypto sceptic but changed his mind and embraced cryptocurrencies ahead of the election.

He has pledged to make America “the crypto capital of the planet” and create a “strategic reserve” of bitcoin.

His campaign accepted donations in cryptocurrency and he courted crypto fans at a bitcoin conference in July. He also launched World Liberty Financial, a new venture with family members to trade cryptocurrencies.

Elsewhere, the parent company of Mr Trump’s social networking site Truth Social lost $19.2m in the last quarter, according to an earnings report.

Trump Media and Technology Group said that much of that loss stemmed from more than $12m in legal fees, along with a decline in revenue, according to the surprise Election Day earnings report.

Its stock price rose 3 per cent on Wednesday after earlier jumping nearly 35 per cent, but that was more likely to be due to Mr Trump’s defeat of Kamala Harris to retake the presidency than on its profit prospects.

Revenue for the three-month period that ended on September 30 was just over $1m, down nearly 6 per cent from a year earlier.

Trump Media has now lost more than $363m so far this year.

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