Tesla: Turbulence and Triumph in the Wake of the Trump Era

Last year rather cautiously, Tesla's stock recorded a remarkable upward trend in the past month. This development was fueled by hopes that Donald Trump's victory could have positive effects on the electric vehicle manufacturer. CEO Elon Musk positioned himself as a close supporter of the president-elect and generously supported his campaign in advance. After the election, the stock experienced a rapid rise, supported by investors' assumption that the policies under the Trump administration are likely to be favorable to Tesla. On November 11, the stock price reached its peak and then moved sideways amid mixed news. According to data from S&P Global Market Intelligence, the stock increased by 38% in November. Musk's close ties to Trump could prove advantageous if he succeeds in advancing federal regulations for autonomous vehicles, thereby bringing Tesla's new Cybercab to the streets. However, the safety of these vehicles remains a crucial test, as there is likely to be significant resistance if they are approved without adequate safety standards. At the same time, a potential conflict looms, as Trump is known as a promoter of fossil fuels and is notoriously against electric vehicles. The possible elimination of the $7,500 EV tax credit could hit Tesla's competitors harder, yet it suggests that the new administration is less committed to renewable energies than the previous administration. Tesla struggled this year with stagnant sales and declining profits, but surprised with a more profitable third quarter. Additional challenges could arise from Trump's tariff threats and growing tensions with China, a major market for Tesla. Despite Musk's forecasts of production growth of over 20% in the coming year, investors also seem to factor in advances in autonomy and positive political developments under Trump. The valuation of Tesla carries significant expectations.