Trump wins: Promises to protect Musk because 'he is a supergenius'

Tesla shares fly, but what happens to zero-emission mobility with the tycoon as new president?

By: Francesco Barontini

Nov 6, 2024 at 5:26am ET

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Donald Trump has won. He will return to the White House for a second term, becoming the 47th president of the United States of America. The victory of the tycoon, already leading the country between 2017 and 2021, makes Elon Musk, who supported the leader of the Republican party by personally associating himself during these agitated months of campaigning, happy.

After vitriolic words in the past, the two have spoken honeyed words to each other. And even today, during his acceptance speech, Trump called Musk a 'super-genius' and a 'special individual', to be protected because 'there aren't many of them'.

But what consequences does this much-discussed friendship have for Tesla and the other companies that gravitate around Musk? And what will now happen to the electric car, supported by the Biden administration but often criticised by Trump himself? Let us try to understand it.

Tesla flies on the stock market

Let's start with one fact: Tesla's shares are rising with double-digit percentages. Trump's victory is good for the company led by Elon Musk. The shares closed yesterday on Wall Street with a +3.54%, but are expected to make a substantial move higher when trading reopens today.

The price in the US, which in after-hours trading touched a further +8%, is expected to follow that of the Frankfurt Stock Exchange, which opened this morning with +14%. But why are Tesla shares rising if Trump, on more than one occasion, has criticised the green transition and warned that he will cut subsidies on the electric car, i.e. the $7,500 federal incentives?

Despite the countless negative references, the tycoon has also put in his sights the (non-binding) goal of bringing full electric and plug-in hybrid cars to 50 per cent of the US market. Is it possible, then, that investors are so swayed just because there is mutual respect between the two figures? Not really.

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Why Tesla wants a stop to contributions

First of all, the newly appointed chairman himself has recently softened his stance, stating: 'I'm in favour of electric cars. I have to be because Elon has been very supportive'.

Then it has to be said that Elon Musk himself explained his support for Trump with personal convictions and there is no reason to question these statements. But the victory of the Republicans and their historical 'aversion' to zero-emission mobility is good for Tesla because it allows it to maintain a certain advantage over the competition.

A house with Solar Roof and Tesla storage system

Tesla has built its success on its own strengths and conquered its market share by playing ahead and developing an e-mobility ecosystem that includes cars, Superchargers, photovoltaics and storage systems. These are all fields in which the company has invested directly.

It is clear, therefore, that the fact that other manufacturers can try to catch up by exploiting the substantial state aid provided through the Inflation Reduction Act makes the job easier for other competitors. Or rather: less onerous. Now, with Trump, these aids could diminish, and Tesla could thus remain a step above the others for longer.