it's clear to everyone that Elon Musk supports former President Donald Trump’s candidacy. Musk has donated nearly $119 million so far to a political action committee he set up to support Trump. source: CNN
“He’s bet big here. He dove into the deep end of the pool on this election,” said Daniel Ives, tech analyst at Wedbush Securities.
Early Wednesday, investors were already betting that Trump’s win will also be a win for Musk’s major public holding, Tesla (TSLA), sending shares of his electric vehicle maker up an immediate 13% at the market open, and closing regular trading up nearly 15%.
By Wednesday morning, investors were already speculating that Trump's victory would positively impact Musk's significant public holding, Tesla (TSLA). This anticipation caused Tesla's shares to surge by 13% at the market open, eventually closing 15% higher.
Trump has criticized electric vehicles, arguing they are costly, have limited range, and could harm jobs and the American auto industry. However, despite the potential reduction or elimination of federal support for EVs under another Trump presidency, this might not necessarily be detrimental to Tesla and Musk.
During Biden's administration, there has been substantial government backing for the development and purchase of electric vehicles (EVs). This includes billions in loans to incentivize automakers to invest in EV and battery manufacturing facilities in the U.S., support for charging infrastructure, and a $7,500 tax credit for many electric car buyers. Many industry experts believe Trump will end those programs.
Trump might be more likely to give a green light to Musk’s true self-driving vehicles, yet to be made, along with a fleet of so-called “robotaxis” to give rides without any sort of driver on board.
“In our view, 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,” he said in a note to clients Wednesday, raising his recommendation on Tesla stock from a “Hold” to a “Buy.” He raised his 12-month price target for the stock by $110 to $375 a share." - Garrett Nelson, analyst with CFRA Research.
The bigger problem for Tesla with Trump’s win is that there could be a renewed trade war with China, given the importance of its plant in Shanghai to its global sales and profits. Over 40% of Tesla cars deliveries come from the China market.
Some Tesla investors say that while the new Trump administration is likely to be a negative for the auto industry. Trump could also kill the National Electric Vehicle Infrastructure (NEVI) program to install more EV chargers. However, at least 14 percent of NEVI funds have gone directly to Tesla, which is the largest provider of EV charging in the US. source : TheVerge
“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,” said Wedbush analyst Dan Ives, “coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYD, Nio, etc.) from flooding the US market over the coming years.”
Arguments are on both side let's see how policy changes when Trump sworn in.
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