On Wednesday, Trump defeated Harris to win the US presidential election, causing Tesla's stock price to soar as Tesla investors believe that the Trump 2.0 era will benefit the business empire of billionaire Elon Musk.
Tesla's stock price closed up 14.75% on Wednesday, reaching $288.53, a new high since July 2023.
This has led to a significant increase in Tesla CEO Musk's wealth by approximately $20.9 billion, bringing his total wealth to nearly $286 billion, further consolidating his position as the world's richest man.
Musk was a key ally during Trump's campaign, and in the weeks leading up to the election, the market saw Tesla as one of the 'Trump deals'.
In the early hours of Wednesday local time, Trump highly praised Musk during his victory speech at the Palm Beach Convention Center in Florida.
We have welcomed a new star; a star has been born: Elon, "Trump said. He is an amazing person. We are sitting together tonight. He spent two weeks campaigning in different areas of Philadelphia and Pennsylvania
After Trump's election victory, Musk joked that "there's no need to consider going to a labor camp" and that he will be safe for the next five years. He had previously stated that if Trump lost, he would be "finished".
Tesla will benefit
Wall Street analysts believe that Musk's support for Trump will ultimately benefit Tesla.
CFRA Research senior analyst Garrett Nelson raised Tesla's target price from $265 to $375 on Wednesday, indicating that the stock still has over 30% upside potential.
In our view, Tesla and its CEO Elon Musk may be the biggest winners in the election results, and we believe Trump's victory will help accelerate regulatory approval of Tesla's autonomous driving technology, "Nelson wrote in a report on Wednesday.
Not conducive to the overall electric vehicle industry
However, after Trump takes office, there may be a reduction in tax refunds and incentives for electric vehicles, which could have a negative impact on other companies in the electric vehicle industry.
On Wednesday, investors fled other electric vehicle stocks, with Rivian and Nikola's stock prices falling by over 8% and nearly 2% respectively.
We believe that Trump's election as president is detrimental to the overall electric vehicle industry, as electric vehicle tax rebates/incentives may be canceled, but for Tesla, we see this as a huge positive, "wrote Dan Ives, an analyst at Wedbush, in a report on Wednesday.