Tesla's market cap hits CAD 1.4 trillion amid Trump alliance
The market capitalization of Tesla, whose main shareholder is Elon Musk, surpassed CAD 1.4 trillion on the New York Stock Exchange on Friday. Shares of electric car manufacturers have been soaring following the election of Donald Trump as president, whom Musk strongly supported during the campaign.
Tesla shares are rising more than 5 per cent on Friday, surpassing a value of CAD 1.4 trillion for the first time in history.
Elon Musk gains from Trump's victory
Investors are betting that Tesla’s CEO, Elon Musk, will benefit from a potential Trump administration. Musk was the most vocal promoter of Trump during the campaign and donated over CAD 180 million to help him win the election.
As of Tuesday's close, Tesla had a market capitalization of CAD 1 trillion. Before this week's rally, the car manufacturer's shares had risen about 1 per cent over the year. Now, Tesla's stock price has increased approximately 26 per cent since the beginning of the year.
Tesla joins the growing club of tech companies that are now worth over CAD 1.4 trillion. This group includes Nvidia, Apple, Microsoft, Alphabet, Amazon, and Meta. All these companies, except for Meta, already have a value exceeding CAD 2.8 trillion.
Dan Ives, an analyst at Wedbush Securities, said that a potential Trump administration might mean fewer regulations for Tesla and other companies. Trump previously stated that he might cut the federal tax credit on electric vehicles, which is valued at CAD 10,000 and Ives believes this could be beneficial for Tesla in the long run.
"Tesla has the scale and scope that is unmatched. 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 (BYD, Nio, etc.)," Ives wrote in a note to clients this week.
