Tesla just hit a $1 trillion market cap as Trump’s win powers a stock surge

Tesla’s (TSLA+8.11%) market capitalization hit $1 trillion Friday morning, as Donald Trump’s election win has helped the EV maker’s stock surge this week.

The company’s share price rose more than 6% to about $313 during intraday trading on Friday. It marks the first time Tesla stock has risen above $300 per share since September 2022. The EV giant is now the ninth largest company in the world by market cap.

Tesla CEO Elon Musk’s alliance with Trump appears to be paying off, potentially giving Tesla a significant advantage under the new administration — including some influence on the regulation of driverless vehicles, while at the same time putting its competitors at a disadvantage. This includes possible influence over regulations covering self-driving vehicles.

Gene Munster, managing partner at Deepwater Asset Management, highlighted that Tesla stock surged 44% over the past 12 trading days, far outpacing the Nasdaq’s 4% gain during the same period.

“This is more than just a meme stock,”  Munster wrote in a post Friday on X, the social media company owned by Musk. “The accelerating delivery growth next year (flat-ish in 2024 and up +20% in 2025) and the long-term opportunity around autonomy will power the fundamentals that should lead to further price appreciation.”

In a post earlier this week, Munster wrote that Tesla’s surge in recent days is broadly “based on emotion, that emotion is Elon made a big bet and was right. This gives investors confidence that his next big bet has a greater potential to succeed. His next big bet is autonomy.”

Musk has become a close ally of Trump’s over the past several months, even spending election night with him at Trump’s Mar-a-Lago resort in Florida. Earlier this year, Musk founded and donated at least $80 million to a super PAC that supported Trump’s campaign.

And Musk, who also leads several other firms including SpaceX, is now poised to have some level of role or influence in the upcoming Trump administration.

Musk has agreed to lead what he and Trump call a Department of Government Efficiency (DOGE), a commission that would conduct a “complete financial and performance audit of the entire federal government” and recommend reforms. Musk has said he would cut “at least” $2 trillion from federal spending, which is likely a difficult task given that the federal government has spent $6.75 trillion in fiscal year 2024.

As part of that job, Musk said he would advocate for a national approach to regulating driverless vehicles — a key market for Tesla — and cut overregulation, which he has repeatedly criticized as holding his companies back. SpaceX, Neuralink, X (META-0.41%), and Tesla are collectively the subject of at least 20 recent investigations or reviews.

But whatever his exact role might be in the administration remains unclear. Cantor Fitzgerald CEO Howard Lutnick, who is helping lead Trump’s transition team, said before Election Day that Musk would work “adjacent” to the government and be “writing software” to help the government cut back spending. That would likely allow Musk to continue leading his companies without divesting, as he would have to do if he took an official role.

While Trump’s victory is good for Tesla, it’s expected to be less friendly to other automakers with EV plans. He’s expected to freeze provisions of President Joe Biden’s Inflation Reduction Act of 2022, which provided $7,500 tax credits for American-made EVs. Musk has supported ending the tax credit, believing it would help Tesla sales while slamming rivals.