Under a Trump administration, Tesla may gain significant advantages. For instance, reduced subsidies for alternative energy and electric vehicles could negatively impact smaller competitors. Furthermore, Trump's proposed tariffs on Chinese imports could potentially limit the availability of Chinese electric vehicles in the U.S. market for the foreseeable future.
In a recent report to investors, Wedbush analyst Dan Ives highlighted Tesla's exceptional scale and scope, which may provide a significant competitive advantage in the current environment. This advantage is particularly relevant considering the absence of EV subsidies and the potential for increased tariffs on Chinese imports, which could hinder cheaper Chinese EV manufacturers.
On Wednesday, Tesla's stock experienced a notable surge of 14.8%, while shares of competing electric vehicle companies faced declines. Nio, based in Shanghai, saw a drop of 5.3%, Rivian's stock fell by 8.3%, and Lucid Group also experienced a decrease of 5.3%.
Tesla maintains its dominant position in the United States electric vehicle market, capturing a substantial 48.9% market share as of mid-2024, as reported by the U.S. Energy Information Administration.
The Inflation Reduction Act, signed into law by President Joe Biden in 2022, provides significant financial incentives for clean energy initiatives, including tax credits for both manufacturers and consumers of electric vehicles.
Elon Musk, the CEO of Tesla, has demonstrated his support for former President Donald Trump by contributing a substantial $119 million to mobilize support for the Republican candidate. Additionally, he pledged a daily donation of $1 million to voters who signed a petition in support of his political action committee.
Despite encountering obstacles in the initial part of the year, characterized by diminishing sales and profits during the first half, Tesla experienced a notable 17.3% increase in its profits during the third quarter.
An investigation has been initiated by the U.S. into the company's "Full Self-Driving" system due to incidents involving collisions in low-visibility conditions, including a fatal incident involving a pedestrian. This inquiry encompasses approximately 2.4 million Tesla vehicles manufactured between 2016 and 2024.
Furthermore, investors expressed negative sentiments last month, resulting in a decline in the company's stock value. This occurred following the introduction of Tesla's highly anticipated robotaxi at a Hollywood studio event. Concerns were raised regarding the absence of substantial advancements in autonomous vehicle technology compared to competitors.
Tesla's "Full Self-Driving" software, introduced nine years ago, continues to face scrutiny regarding its reliability.
The company's stock has experienced a notable 16.1% increase year-to-date, buoyed by a recent two-day rally.