Tesla Surpasses $1 Trillion Market Value

By Akash Sriram
(Reuters) – Tesla's market value closed above the $1 trillion mark in a sharp rally on Friday, driven by expectations of favorable treatment under President-elect Donald Trump due to CEO Elon Musk's support during the campaign.

The electric automaker's shares surged 8.2% to $321.22, marking the company's valuation above the trillion-dollar mark for the first time in over two years.

In the past week, the stock has increased by 29%, adding over $230 billion in market capitalization, the best performance since January 2023.

"Tesla (NASDAQ:TSLA) and CEO Elon Musk are perhaps the biggest winners from the election result, and we believe Trump's victory will help expedite regulatory approval of the company's autonomous driving technology," stated Garrett Nelson, senior equity analyst at CFRA Research.

Musk is expected to advocate for favorable regulation of autonomous vehicles, and may also influence the U.S. National Highway Traffic Safety Administration to pause potential enforcement actions related to Tesla's driver-assistance systems, according to a source who spoke with Reuters.

Though Musk has shifted focus to self-driving technology and abandoned plans for an economy car priced under $30,000, challenges in development and regulatory approvals have postponed commercialization.

David Whiston, equity strategist at Morningstar, commented, "If Musk can convince Trump to establish federal autonomous vehicle rules, we think that's a good thing for the auto industry because firms prefer a unified set of rules rather than varying state regulations."

Musk's wealth has surpassed $300 billion, according to Forbes' real-time billionaire list.

In late October, Tesla shares jumped after the company reported an increase in quarterly profit margin and projected 20% to 30% growth in deliveries for the upcoming year.

For years, Tesla has maintained its position as the world's most valuable automaker, with competitors like Japan's Toyota Motor (NYSE:TM), China's BYD (SZ:002594), and others lagging significantly.

Currently, Tesla shares trade at 93.47 times their 12-month forward earnings estimates, in contrast to 38.57 for AI chip giant Nvidia (NASDAQ:NVDA), 30.77 for Microsoft (NASDAQ:MSFT), and 6.29 for Ford (NYSE:F).