Tesla’s market value closed above $1 trillion on Friday following a significant rally, driven by expectations that CEO Elon Musk’s companies will benefit from favorable policies under President-elect Donald Trump. This optimism stems from Musk’s visible support during the election campaign.
The electric automaker’s shares surged 8.2% to $321.22, marking the first time in over two years that Tesla’s valuation surpassed the trillion-dollar milestone. The stock jumped 29% this week, adding more than $230 billion to its market capitalization—its best performance since January 2023.
“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,” said Garrett Nelson, senior equity analyst at CFRA Research. A source told Reuters that Musk could advocate for regulatory support on autonomous vehicles and possibly influence the U.S. National Highway Traffic Safety Administration to delay potential enforcement actions related to Tesla’s driver-assistance systems.
Musk has focused intensely on self-driving technology, moving away from plans for an affordable, sub-$30,000 vehicle. Despite his ambitions, development and regulatory challenges have slowed progress toward bringing these technologies to market. “If Musk can convince Trump to establish federal autonomous vehicle rules, we think that’s a good thing for the auto industry,” said David Whiston, equity strategist at Morningstar, adding that uniform regulations are preferable to a state-by-state approach.
Meanwhile, Musk’s wealth has now topped $300 billion, according to Forbes. Tesla shares also rallied in late October after the company posted higher quarterly profit margins and projected 20-30% growth in deliveries next year.
For years, Tesla has maintained its status as the world’s most valuable automaker, far ahead of competitors like Japan’s Toyota and China’s BYD. Currently, Tesla’s shares trade at a multiple of 93.47 times their 12-month forward earnings estimates, compared with 38.57 for Nvidia, 30.77 for Microsoft, and 6.29 for Ford.