Trump Victory To Help Elon Musk, Not Necessarily Tesla – News18

Last Updated:November 06, 2024, 12:36 IST

Trump’s return to the White House would likely be “overall negative” for the electric vehicle sector

Tech billionaire Elon Musk and his business empire stand to reap massive rewards if former President Donald Trump returns to the White House. However, a Trump victory could have contrasting effects on the electric vehicle (EV) industry and Tesla, according to analysts at Wedbush, as reported by Investing.com.

Trump’s return to the White House would likely be “overall negative” for the electric vehicle sector as per Investing’s recent note, led by analyst Daniel Ives.

They predict that Trump may eliminate EV rebates and tax incentives aimed at promoting non-combustion engine vehicles.

The analysts also highlighted that Tesla, led by CEO Elon Musk—a fierce Trump supporter—possesses “the scale and scope that is unmatched in the EV industry”. This could give Tesla a distinct advantage as its domestic competitors struggle in a market without EV subsidies, the report stated.

Wedbush noted in the Investing report that Trump’s proposed steep tariffs on China would prevent low-cost Chinese EV manufacturers like BYD and Nio from overwhelming the US market in the coming years.

Additionally, the analysts suggested that Trump could expedite Musk’s initiatives in autonomous driving, potentially accelerating Tesla’s technological advancements. Musk recently claimed that Tesla’s new Cybercab robotaxi would enter production “before 2027″.

Despite these potential benefits, the analysts in the Investing report warned that Musk’s support for Trump might negatively affect Tesla’s consumer demand in the US.

While the immediate impact on demand has been limited, they cautioned that this political dynamic could sway some customers away from Tesla in future purchasing decisions.

As investors weigh the implications of the election on Tesla and the broader market, the question remains: Is Tesla stock a buy or a sell?

According to Investing, with the stock market’s volatility, many investors are seeking clearer insights into Tesla’s fair value and potential performance.