Tesla shares soar 13% as Trump win sets stage for Elon Musk's electric vehicle company
UNB
Publish: 07 Nov 2024, 08:43 AM
NEW
YORK (AP/UNB) - Shares of Tesla soared Wednesday following an election that
will send Donald Trump back to the White House, an outcome that had been
strongly backed by CEO Elon Musk in the closing months of the race.
Tesla stands to make
significant gains under a Trump administration with the threat of diminished
subsidies for alternative energy and electric vehicles doing the most harm to
smaller competitors.
Tesla dominates sales of
electric vehicles in the U.S, with 48.9% in market share through the middle of
2024, according to the Energy Information Administration.
Tesla shares jumped 13%
Wednesday while shares of rival electric vehicle makers tumbled.
Trump has proposed
tariffs of 10% to 20% on foreign goods that would also impact electric vehicle
maker's outside the U.S., especially in China, and shares of EV makers there
slid as well in U.S. markets.
"Tesla has the
scale and scope that is unmatched," said Wedbush analyst Dan Ives, in a
note to investors. "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."
Subsidies for clean
energy are part of the Inflation Reduction Act, signed into law by President
Joe Biden in 2022. It included tax credits for manufacturing, along with tax
credits for consumers of electric vehicles.
Shares of rival EV maker
Rivian plunged 9% and Lucid Group fell 3.1%. NIO, a Chinese EV maker, slid 6%.
Musk was one of Trump's
biggest donors, putting more than $70 million of his own money into the
presidential run and other GOP causes. He also pledged to give away $1 million
a day to voters signing a petition for his political action committee.
Yet it has been a rocky
year for Tesla, with sales and profit declining through the first half of the
year. Profit did rise 17.3% in the third quarter.
The U.S. opened an
investigation into the company's "Full Self-Driving" system after
reports of crashes in low-visibility conditions, including one that killed a
pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016
through 2024 model years.
And investors sent
company shares tumbling last month after Tesla unveiled its long-awaited
robotaxi at a Hollywood studio Thursday night, seeing not much progress at
Tesla on autonomous vehicles while other companies have been making notable
progress.
Tesla began selling the
software, which is called "Full Self-Driving," nine years ago. But
there are doubts about its reliability.
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