Nandini Roy Choudhury, writer
Brief news
- Tesla’s market valuation exceeded $1 trillion following an 8% stock increase, driven by optimism around Donald Trump’s election victory, which boosted shares by 29% this week.
- Analysts suggest a Trump administration may reduce regulations, benefiting Tesla’s competitive edge against cheaper Chinese EVs.
- Tesla reported a net income of $2.17 billion and anticipates 20-30% vehicle growth next year, focusing on lower-cost vehicles and autonomy advancements.
Detailed news
The electric vehicle manufacturer’s market valuation surpassed one trillion dollars as a result of the 8% increase in Tesla shares that occurred on Friday.
As a result of Donald Trump’s victory in the presidential election in the United States, the stock of the firm has increased by around 29% this week. Investors have become more hopeful about the possibility that the previous leader’s return to the White House might be beneficial to Tesla. Elon Musk, the CEO of Tesla, has been a significant supporter of Donald Trump during his whole campaign. He has contributed at least 130 million dollars to a campaign effort that is in favor of Trump.
At the end of trading on Tuesday, the total market capitalization of Tesla was $807.1 billion. Before the rise that occurred this week, the carmaker’s stock had gained around one percent for the year. As of right moment, Tesla’s stock has increased by almost thirty percent so far this year.
Tesla is now a member of a growing group of technology companies that are now valued more than one trillion dollars. These companies include Nvidia, Apple, Microsoft, Alphabet, Amazon, and Meta and all of them are worth more than two trillion dollars, with the exception of Meta. October 2021 was the first time that Tesla’s market worth surpassed the one trillion dollar mark.
Dan Ives, an analyst at Wedbush Securities, has reported that a prospective administration led by Trump might result in less regulations being imposed on firms like Tesla and others.
“Tesla has the scale and scope that is unmatched in the electric vehicle industry, and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment,” Ives wrote in a note to clients this week. “This dynamic could also be coupled with likely higher China tariffs that would continue to push away cheaper Chinese electric vehicle players (BYD, Nio, etc.) from flooding the U.S. market over the coming years.”
The federal tax credit for electric vehicles, which is now worth $7,500, has been threatened by Trump in the past. Through the years, these credits have been a significant factor in driving sales of Tesla automobiles.
During the third quarter, Tesla recorded a net income of $2.17 billion and annual sales of $25.18 billion, according to the most recent earnings update that the company provided.
During the results call, CEO Musk stated that his “best guess” was that “vehicle growth” will reach 20% to 30% in the next year. He attributed this anticipated increase to “lower cost vehicles” and the “advent of autonomy.”
Since the beginning of the 21st century, Tesla has been making significant strides in the development of autonomous car technology. Waymo, which is owned by Alphabet and is its primary opponent in the United States, has gotten ahead of the competition and is already providing commercial robotaxi services in a number of big cities.
In a call with investors during the third quarter, Musk stated that he would use his influence to develop a “federal approval process for autonomous vehicles” if a Trump-Vance administration were to take office. In the present moment, permissions are granted at the state level. The Chief Executive Officer of Tesla believes that this is a regulatory obstacle that the company will have to overcome if it eventually delivers more than partially automated driving systems.
Source : CNBC news
