Elon Musk’s relationship with Donald Trump did something Tesla Inc.’s (NASDAQ: TSLA) position in electric vehicle (EV) sales worldwide could not. It took the company’s market cap to over $1 trillion. It is still, however, unclear exactly why on the day after the election. Tesla’s shares moved up 20%. They continued to rise throughout the week. By the end of Friday, they were up 25% for the year, which matches the S&P 500’s performance.
Tesla’s Worth Reaches $1 Trillion
The jump was a turnaround from what appeared to be a rough year. Shares cratered in May because of weaker-than-expected sales and concerns about rivals in China. Even improved third-quarter figures only triggered a modest rally. For that quarter, Tesla produced approximately 470,000 vehicles and delivered about 463,000. Its revenue rose 8% to $25.2 billion. However, auto revenue was up only 2% to $20 billion. Earnings for the company rose 17% to $0.72 per share.
Tesla’s EV market share in the United States slipped below 50% for the first time this year. Its competition in China jumped as local manufacturers, led by BYD, posted sharp sales improvements. Additionally, the overall EV market globally, outside China, slowed.
On October 10, Tesla showed its first robotaxi, called the Cybercab. The production schedule for the car is uncertain. Its success will rely on its ability to be a completely autonomous vehicle, which no car company has been able to do yet. Tesla’s market cap remains tied to its ability to use AI and become the “full self-driving mode” industry leader. The head of Nvidia believes this case, and CEO Jensen Huang recently said, “Tesla is far ahead in self-driving cars.” Beyond the technology hurdle, the approval process to put these vehicles on the road will be complex and may have to be done state by state.
