Could Trump's Return Turbocharge Tesla? Here's What an Expert Thinks
The race for the White House is heating up, and it appears that a potential Trump comeback might spell unique fortunes for Tesla. Wedbush Securities analyst Dan Ives has made a compelling case that a Trump presidency, despite its apparent drawbacks for the electric vehicle (EV) industry, could be a major boon for Elon Musk’s automotive juggernaut.
Trump's Electrifying Choice
On the surface, Trump's anti-EV stance seems to clash with the interests of the sector. But there's a twist: Trump has openly professed his admiration for Elon Musk. Speaking at a rally, Trump stated, 'I’m a big fan of electric cars. I’m a big fan of Elon Musk. I like Elon. And I think a lot of people are going to want to buy electric cars, but if you want to buy a different type of car you have to have a choice.'
Elon Musk has echoed these sentiments, noting that Trump has been 'very nice,' even calling him randomly. Musk speculates that Trump’s positive view of Tesla might be because some of the former president's friends now own Teslas. Intriguingly, Trump is also a huge fan of the Cybertruck, Tesla’s highly anticipated pickup truck.
The Wedbush Perspective
The idea that Trump could indirectly favor Tesla stems not only from his pro-Musk stance but also from the broader political landscape. According to Dan Ives, 'A Trump win would be a negative for the EV industry but could be a silver lining positive for Elon Musk and Tesla for a number of reasons.' During an interview on CNBC’s Last Call, Ives elaborated that Trump could shift the focus away from EV incentives, which might level the playing field in favor of Tesla, a company that has already surpassed the need for federal tax credits.
'I’d say Trump’s pro-Musk, and I’d say it’s bullish. A Trump presidency would be bullish for Tesla, negative for EVs. I think it also speaks to the Biden administration—Musk has really been an afterthought. I think if Trump’s in the White House, Musk becomes more front and center. That’s bullish for Tesla, especially if you start to see those EV rebates roll back—negative on the industry, bullish for Tesla,' Ives explained.
Federal Focus Shift
The Biden administration has largely favored union-made electric vehicles, often sidelining Tesla despite its significant contributions to the EV market. In contrast, a Trump administration could pivot to actively support Musk and his ventures. This shift could place Tesla at the forefront, leveraging its existing market strength to further dominate.
Indeed, Tesla’s competitive edge lies in its ability to scale operations without relying on subsidies. The company has already achieved economies of scale, allowing it to compete effectively even as tax credits diminish. In this light, a potential rollback of federal incentives could disadvantage other EV manufacturers while solidifying Tesla's market leadership.
The Bigger Picture
While the intricacies of political alignments and industry shifts can be unpredictable, the possible synergy between a Trump administration and Tesla presents an intriguing scenario. For investors and enthusiasts alike, it underscores the complex dynamics at play in the EV market, where political currents can dramatically influence business outcomes.
Elon Musk’s relationship with Donald Trump, coupled with Tesla’s robust market position, suggests that the months leading up to the election will be critical for both the company and the broader EV industry. With regulatory landscapes potentially on the verge of transformation, stakeholders should keep a keen eye on how political developments unfold.
As the 2024 elections approach, the potential impacts on Tesla underline the importance of understanding the intersection between politics and technology. Whether a Trump presidency materializes or not, the discussions it sparks will likely have lasting consequences for the EV market and for Tesla’s ambitious journey.'
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