Musk’s Tesla Rides High Under Trump Despite Trade War & Investigations/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Tesla’s stock has surged by half a trillion dollars since Trump’s election, as investors bet on Elon Musk’s growing influence in Washington. With deregulation and relaxed EV rules, Tesla could benefit—but trade war tariffs and federal investigations pose risks. Musk remains bullish, predicting Tesla will become “the world’s most valuable company”, even as controversies mount.
Musk’s Tesla Booms Under Trump: Quick Looks
- Tesla’s market value jumped $500 billion since Trump’s election.
- Investors expect Trump’s deregulation to boost Tesla, despite risks.
- New Transportation Secretary Sean Duffy pledges to ease EV rules.
- Trump’s 10% China tariffs lower than expected, but 25% tariffs on Canada & Mexico could hurt Tesla’s supply chain.
- Trump to eliminate the $7,500 EV tax credit, affecting Tesla sales.
- Tesla investigations continue, including safety probes into Full Self-Driving (FSD).
- Musk predicts Tesla will be worth more than “the next five biggest companies combined”.
- Musk’s far-right endorsements in Europe spark backlash.
Musk’s Tesla Rides High Under Trump Despite Trade War & Investigations
Musk’s Tesla: A $500 Billion Bet on Trump’s Policies
Tesla’s Stock Defies Gravity Amid Market Volatility
Despite a disappointing financial report, Tesla’s stock has skyrocketed since Trump’s re-election, adding more than $500 billion in market value.
“This is the most bullish I’ve ever heard Musk,” said Dan Ives, Wedbush Securities analyst.
The surge comes as investors believe Trump’s policies will favor Musk, particularly with:
- Deregulation for self-driving cars and EV manufacturing.
- Relaxed federal emissions rules, allowing Tesla to sell fewer regulatory credits.
- Stronger U.S.-China trade relations, as Trump’s 10% tariff on Chinese goods was lower than feared.
Tesla’s Big Wins Under Trump
Trump has given Musk unprecedented access, appointing him head of the Department of Government Efficiency, where he is expected to slash regulations.
Trump’s new Transportation Secretary Sean Duffy has:
- Promised to replace state-level EV rules with a single national policy.
- Signaled support for Tesla’s Full Self-Driving (FSD) rollout, despite ongoing safety investigations.
“I see a path where Tesla is worth more than the next five biggest companies combined.” – Elon Musk
Tariffs & EV Credit Cuts: Potential Risks
Not all Trump policies favor Tesla. Key challenges include:
1. Trade War Tariffs Could Hurt Tesla’s Supply Chain
- 25% tariffs on Canada & Mexico could increase Tesla’s production costs.
- Tesla sources many parts globally, making it vulnerable to higher import costs.
- CFO Vaibhav Taneja admitted tariffs would impact Tesla, though the company remains optimistic.
2. EV Tax Credit Repeal Could Slow Sales
- Trump plans to eliminate the $7,500 federal tax credit for EVs.
- This could reduce demand, especially for Tesla’s lower-priced models.
- Tesla still has strong brand loyalty, but higher prices could slow growth.
“The EV market is shifting, and competition is increasing,” said Morningstar analyst Seth Goldstein.
Tesla Investigations Continue, Despite Musk’s Ties to Trump
Musk’s Full Self-Driving (FSD) system remains under federal investigation.
- The National Highway Traffic Safety Administration (NHTSA) is probing several crashes, including a fatal pedestrian accident.
- Musk has blasted safety regulations, but new Transportation Secretary Duffy insists the investigation will not be influenced by politics.
“We will follow the facts, no matter who’s involved,” Duffy told Congress.
Musk’s Controversial Politics: A Growing Risk?
Musk’s political statements could alienate Tesla customers, especially in Europe:
- He endorsed the far-right Alternative for Germany (AfD).
- Called UK Prime Minister Keir Starmer an “evil tyrant.”
- Made a gesture on Inauguration Day that was widely seen as a Nazi salute, sparking international backlash.
The fallout has been severe:
- Germany projected Musk’s image onto Tesla’s Berlin factory in protest.
- In Italy, protesters hung an effigy of Musk upside down, referencing Mussolini’s execution.
“How many Tesla buyers agree with Musk’s politics?” asked auto analyst Felipe Munoz.
Is Tesla Overvalued? Investors Don’t Seem to Care
Despite Tesla’s declining sales and stiffening EV competition, the company’s stock continues to climb.
- Tesla’s value now exceeds $1.3 trillion—larger than GM, BMW, Ford, Ferrari, Porsche, and a dozen others combined.
- Investors believe Musk’s Washington influence will overpower financial setbacks.
- Tesla remains the seventh-most valuable company in the S&P 500.
“Tesla keeps defying gravity,” said analyst Seth Goldstein.
What’s Next for Tesla & Musk?
- Will Trump’s deregulation help Tesla dominate autonomous driving?
- Will tariffs and EV policy shifts hurt Tesla’s profits?
- How will Musk’s political controversies impact Tesla’s reputation?
For now, Wall Street is all-in on Musk, betting that his ties to Trump will create a trillion-dollar boom for Tesla.
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