Uttam Kumar
Tesla’s stock catapulted 12% on Wednesday morning, reaching over $280 per share by 10:10 a.m. EST and establishing a new peak beyond its previous record of $273.54 from October 27. The surge added over $15 billion to CEO Elon Musk’s net worth, bringing his total fortune over $280 billion according to latest estimates.
The market reaction followed Donald Trump’s election victory, during which the president-elect praised Musk as a “super genius” and “new star” in his acceptance speech. The accolades came after Musk’s substantial campaign support, including at least $118 million in contributions through his America PAC, making him Trump’s second-largest financial backer behind Timothy Mellon.
Musk’s political involvement extended beyond financial support. SEC filings reveal he spent approximately $75 million between July and September 2024 through America PAC, focusing on swing state initiatives. His campaign activities included appearances at multiple rallies, particularly in Pennsylvania, and a voter outreach program that distributed $1 million in swing states – though this initiative faced temporary suspension by Philadelphia courts.
Wedbush Securities analyst Dan Ives provided context on the broader implications, noting that while a second Trump presidency could present challenges for the electric vehicle (EV) industry overall, it might benefit Tesla specifically. “Tesla has the scale and scope that is unmatched,” Ives wrote, adding that proposed tariffs on Chinese imports could protect Tesla from competitors like BYD and NIO expanding in the U.S. market.
The political landscape intersects with Tesla’s operational plans, including potential factory developments in Mexico and India. The company currently faces decisions about resource allocation amid shifting profit margins, with pressure to optimize existing facilities for new, more affordable vehicle production. A planned $2-3 billion EV factory in India remains under consideration, though Musk postponed his India visit in May 2024 citing “heavy Tesla obligations.”
Market data shows Tesla trading reached $272 per share in overnight trading on Robinhood’s platform, while Nasdaq late trading recorded a 2.9% increase to $258.70. These movements reflect investor optimism about potential policy benefits under a Trump administration, particularly regarding corporate tax structures and regulatory frameworks.
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The Trump-Musk alliance solidified earlier in the campaign when Musk endorsed Trump in July 2024, arguing the candidacy was essential “to preserve democracy.” Their partnership may extend into governance – Trump has proposed creating a “Department of Government Efficiency” (nicknamed ‘DOGE’), with Musk potentially leading efforts to reduce federal spending by an estimated $2 trillion.
The Wall Street Journal’s investigation revealed Musk’s financial support for Republican causes began flowing quietly in 2022, including donations to groups aligned with both Trump and former candidate Ron DeSantis. Musk’s influence extends beyond direct contributions through his ownership of X (formerly Twitter) and his position as the world’s wealthiest individual.
For the automotive sector, particularly the EV market, these developments arrive during a critical phase of industry transformation. Tesla maintains its position as a major U.S. EV manufacturer, though it recently ceded the global production crown to BYD. The company’s stock performance and Musk’s increased political involvement create new variables for investors analyzing Tesla’s market trajectory and competitive position.
