Tesla’s market value surpassed the $1 trillion mark on Friday, fueled by a robust rally linked to expectations that Elon Musk’s enterprises will benefit from favorable policies under President-elect Donald Trump.
Trump’s support during the campaign is believed to have positioned Musk’s companies for advantageous treatment.
Shares of the electric vehicle manufacturer jumped 8.2% to $321.22, pushing Tesla’s valuation over the trillion-dollar threshold for the first time in two years.
The stock’s value increased by 29% this week alone, adding more than $230 billion to its market capitalization—marking its best performance since January 2023.
“Tesla and CEO Elon Musk are perhaps the biggest winners from the election result, and we believe Trump’s victory will help expedite regulatory approval of the company’s autonomous driving technology,” said Garrett Nelson, senior equity analyst at CFRA Research.
Sources suggest that Musk is poised to lobby for favorable regulations on autonomous vehicles, which could include persuading the U.S. National Highway Traffic Safety Administration to postpone any potential enforcement actions regarding the safety of Tesla’s current driver-assistance systems.
Musk has focused on advancing autonomous vehicle technology, shelving earlier plans to develop an economy car priced below $30,000 due to developmental and regulatory hurdles.
“If Musk can convince Trump to establish federal autonomous vehicle rules, we think that’s a good thing for the auto industry because we think firms want one set of rules rather than each state making their own,” said David Whiston, equity strategist at Morningstar.
Tesla’s share price also rose sharply in late October following reports of improved quarterly profit margins and projected delivery growth of 20% to 30% for the coming year.
Tesla continues to hold its position as the world’s most valuable automaker, significantly outstripping rivals such as Japan’s Toyota Motor and China’s BYD.
Currently, Tesla’s shares trade at 93.47 times their forward 12-month earnings estimates, compared to Nvidia at 38.57, Microsoft at 30.77, and Ford at 6.29.
