By Akash Sriram
(Reuters) -Tesla’s market value closed in a sharp rally above the $1 trillion mark on Friday, on expectations that CEO Elon Musk’s companies will receive favorable treatment under newly-elected President Donald Trump due to his extensive support during the poll campaign.
The electric carmaker’s shares rose 8.2% to $321.22, pushing the company’s valuation above the trillion-dollar mark for the first time in more than two years.
The stock gained 29% this week, adding more than $230 billion in market cap, the best since January 2023.
“Tesla (NASDAQ:) and CEO Elon Musk may be the biggest winners from the election results, and we believe Trump’s victory will help accelerate regulatory approval of the company’s autonomous driving technology,” said Garrett Nelson, senior equity analyst at CFRA Research.
The billionaire could push for favorable regulation of autonomous vehicles that Tesla plans and also ensure that the US National Highway Traffic Safety Administration (NSA) staves off potential enforcement actions related to the safety of Tesla’s current driver assistance systems, a source had said told Reuters.
Musk has focused on self-driving vehicle technology and abandoned plans to build an economy car priced below $30,000. However, development and regulatory hurdles have slowed the commercialization of such technologies.
“If Musk can convince Trump to enact federal rules for autonomous vehicles, we think that’s a good thing for the auto industry because we think companies want one set of rules instead of each state making its own.” , says David Whiston, equity strategist at Morningstar.
According to Forbes’ real-time billionaire list, Musk’s net worth was over $300 billion.
Shares of Tesla rose in late October after the company reported a rise in quarterly profit margin and forecast 20% to 30% growth in deliveries next year.
It has been the world’s most valuable car manufacturer for years, together with Japan’s Toyota Motor (NYSE:), China BYD (SZ:) and others lag behind by a wide margin.
Tesla shares are trading at 93.47 times their forward 12-month earnings estimates, compared to 38.57 for AI chip giant Nvidia (NASDAQ:), 30.77 for Microsoft (NASDAQ:) and 6.29 for Ford (NYSE: ).
