(News Bulletin 247) – In just under two months, the action of the automobile group specializing in electric vehicles has taken off, driven in particular by anticipations of favorable measures from the Trump administration. To the point that Tesla now weighs almost as much as all other automobile groups listed on the stock exchange, according to companiesmarketcap.com.

If there is a group that benefited, on the stock market, from the election of Donald Trump on November 6, it is Tesla.

Since the Republican candidate’s victory in the race for the White House, Tesla has jumped 80.61%. The stock hit a session record of $483.99 on December 17 and its market capitalization currently stands at $1,457 billion. Which makes Tesla the eighth largest publicly traded company in the world.

Above all, Tesla is completely floating among the automobile groups, with historic manufacturers suffering from ungenerous multiples due to the cyclical nature of their activity. According to data from companiesmarket.com, the entire capitalization of listed automakers amounts to $2.953 billion.

In other words, Tesla alone weighs almost as much as all the other automobile manufacturers listed on the stock exchange.

A strengthened competitive advantage

The group led by Elon Musk, a big supporter of Donald Trump during the presidential campaign, owes a lot on the stock market to the election of the businessman.

Certainly, Tesla had begun to reassure the market before its victory, with its third quarter results. The group had generated margins higher than expected and Elon Musk had indicated that he was counting on a strong recovery in volumes for 2025, with growth ranging from 20% to 30%.

However, the manufacturer’s stock market rally was mainly realized once the Republican won the election. Previously, the automobile group only gained 1.2% over the whole of 2024 on the stock market. This figure has now increased to 82.8%.

The market anticipated favorable measures for Tesla from the future administration. Certainly, Donald Trump is known for his hostility towards electric vehicles. On December 17, Reuters reported that the president-elect’s transition team had recommended ending support measures for this type of motorization.

But, paradoxically, such decisions would be likely to strengthen Tesla’s competitive advantage. Quite simply because due to its technological advance and its size, Tesla is already largely profitable and depends much less on subsidies (or other government support measures) than other manufacturers in the electric sector.

“Tesla has unmatched scale and reach in the electric vehicle industry and this dynamic could give Musk and Tesla a clear competitive advantage in a subsidy-free environment for electric vehicles, coupled with likely higher Chinese tariffs that would continue to push back Chinese players from cheaper electric vehicles (BYD, Nio, etc.) to flood the American market in the years to come”, explained Dan Ives, analyst at Wedbush, in November.

Heading towards autonomy

Other reports indicated that the incoming Trump administration could also take steps favorable to autonomous vehicles, such as creating a federal framework. But Tesla has placed a lot of emphasis on this technology.

“The Trump administration has announced that it wants to simplify regulations concerning autonomous vehicles, in order to promote their deployment on a national scale, which has naturally benefited Tesla,” Edmond de Rothschild Asset Management underlined at the end of November.

Elon Musk had previously judged that autonomous driving constituted the heart of the reactor of Tesla’s market capitalization. “The valuations are sometimes strange. (…) I think that the value of the company depends above all on autonomy,” he estimated in 2023 in Paris.

Tesla also held a “Robotaxi Day” in October during which the group presented its advances in autonomy. This meeting was, however, received coldly by the market, due to the lack of details.

“We are increasingly optimistic about Tesla’s Robotaxi segment, following President-elect Trump’s plans to potentially develop a federal framework for self-driving vehicles in the United States,” analyst Andres Sheppard nevertheless wrote in mid-December. at Cantor Fitzgerald, cited by Bloomberg.

Elon Musk’s proximity to Donald Trump coupled with these expectations therefore caused a significant increase in the stock. Can Tesla, which is still accustomed to sudden downward or upward reversals on the market (the stock once lost more than 30% over the whole of 2024), go higher?

Of the 47 research firms tracking the stock, 19 are Buy, 15 Hold and 13 Sell, according to investing.com.

Soon 2,000 billion dollars on the stock market?

Beyond speculation about the Trump administration’s measures, Bank of America is confident in the group’s fundamentals. In a note published at the beginning of December, the American bank underlines in particular that the next low-cost vehicle (less than $30,000) that Tesla is due to launch in the second half of 2025 will increase its addressable market.

In addition, the adoption of its FSD (full self-driving) autonomous driving ecosystem (sensors, software) is gaining momentum. “In the first quarter of 2023, Tesla had 400,000 subscribers on 1.8 million eligible vehicles. In the second quarter of 2024 and the third quarter of 2024, the number of subscribers grew faster than the number of eligible vehicles, meaning that the “Adoption of FSD is accelerating”, explains the establishment.

Bank of America also notes that the company could launch a capital increase to finance its developments in autonomy, robotics and artificial intelligence, at a very low cost. Currently, raising more than $50 billion with a dilution of only 4%-5% would be possible, according to her.

“Tesla has revitalized its growth story,” appreciates the bank. Bank of America believes that the launch of new products and licensing agreements on FSD technology can be catalysts for the stock.

Known for his pronounced and unwavering optimism, Dan Ives of Wedbush sees far ahead. The analyst recently raised his price target on the stock to $515 (14% upside potential), and even to $650 (44% upside potential) in a bullish scenario. In the latter scenario, Tesla would have a market capitalization of $2.05 trillion.

Dan Ives estimates that Tesla’s autonomy and artificial intelligence technologies alone could be worth more than $1,000 billion on the stock market.

“We believe that the Trump White House over the next four years will represent a ‘total game changer’ for the story of autonomy and AI for Tesla and Musk over the next few years.” he. The analyst expects Elon Musk to use his influence in the White House to ensure that Tesla is not affected by potential trade retaliation measures from China.

Dan Ives also excluded from his forecasts any value linked to Optimus, Tesla’s humanoid robot, although this technology could, according to him, represent “a major catalyst in Tesla’s stock market history for years to come”.