Tesla (TSLA 14.13%) stock is making big gains in Wednesday’s trading. The electric-vehicle (EV) company’s share price was up 22.8% as of 12:30 p.m. ET. Meanwhile, the S&P 500 index was up 2.1%, and the Nasdaq Composite index was up 2.4%.
Tesla stock is surging following Donald Trump’s victory in the 2024 presidential election. The Republican candidate outperformed most expectations and is poised to win the national popular vote, in addition to a decisive win in the electoral college.
Why Tesla stock surged on Trump election victory
While there isn’t any fresh business-specific news for the EV leader today, CEO Elon Musk was an active supporter and campaigner for Trump in the election — and some analysts think that the Republican’s victory in the race will open opportunities for Musk’s company. Musk campaigned for Trump and celebrated the victory with the Republican last night. He’s also indicated that he could have a role in the new presidential administration.
In response to election results, Wedbush published a bullish note on Tesla stock. Ahead of the market opening today, the firm’s analysts anticipated a strong bullish momentum for Tesla’s share price in the day’s trading and also highlighted the potential for longer-lasting positive catalysts for the company.
What comes next for Tesla?
As noted in Wedbush’s bullish, election-related note on Tesla, it’s possible that new tariffs implemented by the incoming Trump administration could have some beneficial impacts for the business. While the costs for some parts could increase, tariffs could have the effect of making it harder for Chinese EVs to gain market share.
Notably, Wedbush said that Trump’s presidency could be a net negative for the broader EV industry. The firm’s analysts expect that EV rebates and tax incentives could be rescinded under the incoming administration. While this could hurt overall demand for EVs, it could actually strengthen Tesla’s competitive positioning and make it more difficult for rivals to gain ground in the market.
Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.