When, on October 23, the polls still indicated a close result or even a victory for Democrat Kamala Harris, Tesla's shares, the manufacturer owned by Elon Musk, were trading at just $213 per share on Wall Street.
This Wednesday, it started the session on the rise, once again, above $328, nearly 50% higher in less than a month. Wall Street's clear bet is that Musk will take advantage of the position and influence granted by President-elect Donald Trump and that it will be very beneficial for his own businesses. It points to a colossal conflict of interest, as the world's richest person will influence the regulation of the world's largest economy, but for now, it is trading higher on Wall Street.
Veteran technology stock analyst at the U.S. firm Wedbush, Dan Ives, is clear: Tesla's target price is no longer the $300 per share reached during the elections: "Now it's $400". Such a revaluation symbolizes the bet - whether counterproductive or not - on Trump's policies of less regulation, incentives, and taxes, as well as the current competitive drama in Europe with worrying future prospects in a sector where Spain is the second-largest producer in the Old Continent. By surpassing a trillion dollars in market capitalization, Tesla is now worth more than three times the combined value of the top ten European manufacturers. A tremendous example is that, in the last ten years, Tesla has appreciated by over 25,000% while a European emblem and a major investor in Spain like Volkswagen has fallen by 50%.
Even the Japanese group Toyota - although worth a third of Musk's automotive empire - also surpasses alone the combined value of Ferrari, Porsche, Mercedes, Volkswagen, BMW, Stellantis, Renault, Volvo, Polestar, or Aston Martin, the ten with headquarters in Europe. They are losers of Trump's campaign announcement to eliminate subsidies for electric vehicle purchases and impose tariffs - "the most beautiful word" - on exports from other countries. Investors are betting that a new market without subsidies has a winner: Musk. This entrepreneur - who has donated over $100 million for the Republican to win - has made Tesla a competitive and innovative group and will benefit from a new era of deregulation in Washington for self-driving cars.
"We believe that Trump's victory in the White House will change the history of Tesla and Musk in the coming years. The opportunity of artificial intelligence and autonomous driving is worth a trillion dollars for this company alone," says the aforementioned Ives. In other words, it will double in value after this American presidency.
Other investment banks do not go that far, but they are also optimistic. "Tesla can benefit from a shift towards federal regulation of vehicles with Full Self-Driving (FSD) system," says Bank of America. Musk is already Trump's favorite business advisor in the new "Department of Government Efficiency," so his influence on all regulatory bodies is potentially enormous and unpredictable.
For now, what is advocated in Newsweek by public policy professor Donald Moynihan is not taken into account: "Musk presents huge and multiple conflicts of interest that should prohibit him from working in the Trump Administration," he states. This is based on the president-elect's statement that Musk's advisory department "will provide advice and guidance from outside the Government and will partner with the White House." Between the lines, it is inferred that the owner of Tesla and the space group SpaceX will have influence in deciding which agencies should reduce budgets and how many surplus officials there are, among other measures. Tesla and SpaceX have received billions in subsidies and public contracts, but Musk now has an easier path to continue without them.
All this power accentuates the importance of the report by former Italian Prime Minister, Mario Draghi, on the survival risk of this European industry that still generates, according to the Anfac employers' association, over two million jobs in Spain.
In his convoluted intervention before the European Parliament, the candidate to lead the Competition portfolio with responsibilities in energy transition, Teresa Ribera, toned down her stance on the automotive industry compared to previous statements as a minister in Spain. She did not repeat her famous 2018 statement that "diesel's days are numbered" and showed a willingness to dialogue with European car manufacturers, but it seems belated in the face of Tesla's explosion, which will have many more resources to innovate in the cars of the future than the European manufacturers who are so heavily punished by investors. "The automotive sector is a key example of the EU's lack of industrial policy planning. The principle of technological neutrality has not always been applied in the automotive sector," Draghi defends, discrediting policies like those of the Spanish Government.
And yet, it is also a key European industry for innovation. "In 20 years, the top three U.S. companies that have invested the most have gone from pharmaceuticals to technology and then to digital. On the contrary, in Europe, they remain in the automotive sector (...) It continues to be concentrated in sectors with mature technologies and where productivity slows down." Draghi also emphasizes that the U.S. has reacted more quickly to the Chinese threat. Musk argues that eliminating subsidies "will benefit Tesla," says the world's richest person, already equivalent to the entire GDP of, for example, Catalonia.