Tesla’s Stock Jumps After Trump’s Victory

Investors believe that the electric car company led by Elon Musk will benefit from his support of the president-elect.

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Elon Musk defied conventional corporate wisdom by committing wholeheartedly to Donald J. Trump’s presidential campaign, donating tens of millions of dollars and running a get-out-the-vote drive.

Now that bet has paid off, giving Mr. Musk a direct line to the White House that he may be able to use to bend policy in ways that could benefit Tesla, his electric car company. Mr. Trump has even floated the idea of appointing Mr. Musk to head a “government efficiency” commission.

One indication of how much Tesla could benefit was evident on Wall Street. The company’s share price rose nearly 15 percent on Wednesday.

It is too early to say how much of Mr. Musk’s newly acquired political capital he will allocate to Tesla as opposed to his other businesses like SpaceX, a major government contractor, or xAI, an artificial intelligence start-up.

But investors clearly believe that a Trump administration will be good for Tesla, despite the president-elect’s often-expressed disdain for electric vehicles and renewable energy.

Mr. Musk’s top priority is likely to be easing regulations on self-driving software that he has described as pivotal to Tesla’s future. That could include pressuring the National Highway Traffic Safety Administration to be less aggressive in scrutinizing the company’s technology. The safety agency is investigating whether a Tesla system that the company calls “full self-driving (supervised)” was responsible for four collisions, including one that killed a pedestrian.

The Trump administration and Republicans in Congress could also pass a national standard for self-driving cars, overriding the current patchwork of state rules. A national standard has long been a goal of Tesla and other companies like Waymo, a business owned by Google’s parent company that operates a self-driving taxi service in Phoenix, Los Angeles and San Francisco.

“Elon will likely be rewarded with some efficiency czar position, which could accelerate adoption of a single autonomous driving standard instead of 50 different state regulations,” Gary Black, managing partner of the Future Fund, which holds Tesla shares, said Wednesday on social media.

But the bonhomie between Mr. Trump and Mr. Musk has obscured major policy differences between the two men that may now come to the fore.

Mr. Trump has vowed to end Biden administration policies that award tax credits to electric vehicle buyers and subsidies for carmakers that build cars and batteries in the United States.

The subsidies will be worth $800 million to General Motors this year, the company has said, allowing it to offer an electric sport utility vehicle, the Equinox, for as little as $35,000 before tax credits.

Elimination of the subsidies would probably hurt other carmakers more than Tesla, but it would suffer, too.

Mr. Musk would also have to worry that Republicans would eliminate rules that compel carmakers to buy clean air credits if they fall short of pollution standards.

Tesla generates a surplus of credits because it makes only electric cars. Selling the credits brought in $739 million in the third quarter, or one-third of the company’s profit.

A trade war with China would also be bad for Tesla. It is one of Tesla’s largest markets, and the company operates a factory in Shanghai that exports cars around the world. Mr. Trump has promised to impose punitive tariffs on Chinese goods.

“Trump is no fan of the E.V. industry,” Mr. Black said on X.

Still, others were less worried. Tesla thrived in the past without tax credits, said Ben Rose, president of Battle Road Research, who follows the company. And the cars the company sells in the United States are all made in Texas and California, he noted. “Tesla has wisely shielded itself from restrictive tariffs,” Mr. Rose said in an email.

Our Coverage of the 2024 Election

The Presidential Race

• How Trump Won: After the Jan. 6 attack on the Capitol, even many Republicans believed Donald Trump’s political career was over. He proved everyone wrong.
• America Hires a Strongman: With Trump’s win, the United States stands on the precipice of an authoritarian style of governance never before seen in its history.
• A Different Kind of Country: Trump’s comeback victory has established him as a transformational force reshaping the United States in his own image.

Other Results

• Senate: Republicans seized control of the chamber, picking up at least three Democratic seats and protecting their own embattled lawmakers.
• House: Several important races were still undecided as of Wednesday morning, leaving the fate of the majority unclear.
• Abortion Ballot Measures: Voters in seven states approved ballot amendments establishing a right to abortion in their state constitutions.

More Coverage and Analysis

• Takeaways: Here are 10 takeaways from an election that is likely to again place America’s democracy under enormous stress.
• A Red Shift: Of the counties with nearly complete results, more than 90% shifted in favor of Trump.
• JD Vance: The 40-year-old senator, who went from anti-Trump author to pro-Trump defender, will be one of America’s youngest vice presidents.