Investing.com -- Tesla (NASDAQ:TSLA) shares rose sharply in early trading as investors reacted to a likely victory for Donald Trump in the US presidential election.
The electric vehicle (EV) giant is viewed as a key beneficiary of a potential Trump win, with CEO Elon Musk being a major backer of the former president’s campaign.
Tesla shares surged 13% in premarket trading Wednesday, adding to the 3.5% gain recorded a day earlier.
The share price jump comes after Trump took a significant lead over Vice President Kamala Harris in the Electoral College, based on NBC News’ latest count.
In October, Musk contributed close to $75 million to America PAC, the super PAC he founded earlier this year to back the Republican candidate.
Trump has pledged to appoint Musk to lead a new government efficiency commission if he wins. Speaking at Trump’s rally at Madison Square Garden last month, Musk claimed he could help trim $2 trillion from the federal budget in that role.
“Your money is being wasted, and the department of government efficiency is gonna fix that,” Musk said to the crowd. “We’re going to get the government off your back and out of your pocketbook.”
Analysts at Wedbush led by Dan Ives said a Trump presidency would be “an overall negative” for the broader EV industry but a “huge positive” for Tesla.
“Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players from flooding the US market over the coming years,” analysts wrote.
They also point out that Trump could speed up some of the Full Self-Driving (FSD) and autonomous initiatives for Tesla.
Ives and his team believe a Trump win could add $40-$50 per share to Tesla’s stock if these initiatives are accelerated in 2025, and would also be a tailwind for Cybercab.