Elon Musk's Tesla is ready for a 'new era,' analyst says — thanks to Donald Trump
Tesla (TSLA) is riding President-elect Donald Trump’s return to the White House to a giant stock surge. That has one of its biggest bulls declaring a “new era” for Elon Musk’s automaker.
Wedbush Securities managing director and senior equity research analyst Dan Ives said Monday that he was raising his price target for the stock to $400 per share from $300 per share, citing Trump’s win as a “game changer” for the company’s autonomous vehicle plans. Musk’s alliance with Trump — which saw him campaign on Trump’s behalf in a key swing state and promote Trump’s candidacy across social media for months — has won him a sizable amount of influence.
Musk has agreed to lead what he and Trump call the Department of Government Efficiency (DOGE), a commission that would audit the “entire” federal government and recommend reforms. Musk wants to cut “at least” $2 trillion from federal spending, which is likely a difficult task given that the federal government has spent $6.75 trillion in fiscal year 2024.
As part of that job, Musk said he would advocate for a national approach to regulating driverless vehicles — a key market for Tesla — and cut overregulation, which he has repeatedly criticized as holding his companies back. SpaceX, Neuralink, X, and Tesla are collectively the subject of at least 20 recent investigations or reviews.
Ives wrote, “In essence, Musk made a strategic and big bet on a Trump White House win that will be known as a ‘bet for the ages’ for TSLA bulls as now Tesla and Musk are set to reap the benefits from a new friendlier regulatory era in the Beltway ahead.”
Trump is set to pull funding from the Inflation Reduction Act, which has fueled electric vehicle investments, and nix the $7,500 tax credit for new EV purchases. According to both Ives and Musk, that’s likely positive for Tesla, given its dominance in the market. It may also boost sales leading up to the end of 2024 as consumers rush to take advantage of the tax credit before it’s canceled.
Musk is also likely to have some influence on Trump’s plans to slap Chinese imports with major tariffs, given his help in electing the president and his close relationships with Beijing officials. Musk has been described as “extremely pro-China” by experts, and he has repeatedly echoed Beijing’s talking points on issues such as Taiwan and AI.
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Earlier this year, Musk skipped a meeting with India’s prime minister to convince Chinese officials to let Tesla roll out its driver assistance software in China, the company’s second-biggest market. Tesla operates a massive factory in Shanghai.
According to Ives, investors can expect tariff negotiations to end with a carve-out for both Tesla and Apple (AAPL), allowing those firms to avoid the brunt of any duties. Apple CEO Tim Cook in 2019 got his company an exemption from a series of tariffs imposed by Trump’s first administration. In 2019, Tesla was denied an exemption on tariffs related to its Model 3, which later led to a lawsuit.
Telsa’s gains last week drove it to a $1 trillion valuation as of Friday afternoon, when it breached $300 per share for the first time in more than two years. The stock is up by almost 7% in pre-market trading Monday to roughly $342 per share. Over the past week, the stock has climbed almost 40%.
Despite the sizable amount of cash Musk spent on electing Trump and some Republican candidates in the House (some $130 million), that’s Musk’s equivalent of pocket change at this point. Tesla’s rally has pushed his net worth to as much as $314 billion as of Friday, according to Bloomberg’s Billionaire Index. His wealth has already gone up by almost $85 billion this year.
