Tesla shares have been rising since Donald Trump won the U.S. presidential election, despite the president-elect’s plans to target key interests supporting the electric car maker. The stock has soared more than 37% since the election, while traditional automakers such as Ford and General Motors have also gained more than 5%. Since Trump’s victory, pure electric vehicle stocks such as Rivian and Lucid have performed flat, falling more than 3% each. So why is Tesla stock soaring at a time when a second Trump administration is expected to fundamentally disrupt the U.S. electric vehicle market? Trump plans to eliminate the $7,500 tax credit for people who buy electric vehicles and has vowed to eliminate all unspent funds under the Inflation Reduction Act. Higher tariffs could make electric vehicles more expensive to invest in. Bernstein analyst Toni Sacconaghi told clients in a note on Monday that these headwinds ignore the fact that Trump’s new best friend is Tesla CEO Elon Musk. A fact. Musk spent about $200 million to help elect Trump and is leading a new government effectiveness group with former Republican presidential candidate Vivek Ramaswamy. Sacconaghi, who has an underperform rating on the stock, told clients: “As a result, Trump is more favorable to electric vehicles and the broader Elon interests.” On the other hand, traditional automakers Ford and General Motors The situation is difficult, with almost no positive comments after the election. A report released by UBS on Friday said that once the electric vehicle tax credit is eliminated, they will face reduced sales and impaired profitability, or they may have to significantly cut prices and harm profits. Sacconaghi said the biggest potential impact for Tesla is the acceleration of self-driving vehicle testing. Trump plans to relax rules for self-driving cars, people familiar with the matter told Bloomberg. Tesla shares rose about 8% on Monday after the report was released. Sacconaghi said that while regulatory authority over self-driving cars rests primarily with states, Trump could at least choose someone with a more favorable view of the technology to lead the National Highway and Traffic Safety Administration and end regulations on Tesla investigation. Barclays analyst Dan Levy told clients in a note on Monday that Musk’s role in Trump’s inner circle also reinforces “the thesis that it’s difficult to bet against him,” driving post-election sentiment. Options activity and retail buying. Levy wrote that some would argue that Tesla’s rise has led to a greater disconnect between the stock and the company’s actual fundamentals. But analysts say Tesla’s fundamentals have remained largely stable after the election, and Musk’s relationship with Trump underscores how much Tesla controls the development of self-driving cars. “Right now, it may be difficult to crack the stock as long as the fundamentals are solid and the premium narrative is in place,” Levy told clients. He rates the stock equal weight. Despite potential advantages for Tesla under Trump compared with its rivals, Bernstein and Barclays still see shortcomings. Barclays raised its price target to $270, but that’s still a nearly 16% correction from Friday’s closing price of $320.72. Bernstein’s target is $120, implying a 63% downside.
Wall Street analysts explain why Tesla is booming after the election while other electric car makers struggle | Real Time Headlines
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