Tesla reached a significant milestone on Friday, with its market value surpassing $1 trillion for the first time since early 2022. The electric vehicle maker, led by Elon Musk, is experiencing a massive rally after Musk-backed Donald Trump secured a second presidential term. Shares of Tesla have surged 24% since Tuesday.
Shares of Tesla jumped more than 10% to nearly $330 in afternoon trading before closing with an 8% gain at $321, extending its three-day rally to 28%. This remarkable increase led the broader stock market gains following Trump’s election. Tesla’s market value now exceeds $1 trillion for the first time since April 2022.
Elon Musk’s net worth topped $300 billion on Friday for the first time in over two years. The 53-year-old saw a significant rise in wealth during Tesla’s stock rally, making him $70 billion wealthier than his closest competitor, Larry Ellison, Oracle chairman.
Tesla reaches significant valuation milestone
Musk is Tesla’s largest shareholder with a 13% stake worth about $130 billion. Shares of Tesla are still about 25% below their split-adjusted peak of $415, set in late 2021 when Musk’s net worth peaked at roughly $320 billion. Musk had endorsed Trump in July, donating about $130 million toward his election efforts and becoming a frequent figure on the campaign trail, including at Trump’s victory celebration.
Musk and Trump have publicly discussed Musk’s potential role in the Trump administration, with discussions hinting at a position as the “secretary of cost-cutting.”
Stocks have risen across the board this week, with the S&P 500 experiencing its best week this year. American car companies Ford and General Motors are up 7% and 8%, respectively. Wedbush analyst Dan Ives outlined several ways in which a Trump presidency could benefit Tesla, including the potential elimination of electric vehicle federal tax credits, Trump-backed tariffs on Chinese imports, and the potential for Trump to “fast track” regulatory approval of Tesla’s self-driving vehicle initiatives.
These factors have contributed to the significant rally in Tesla’s stock price and market valuation. Musk’s rapid ascent in Trump’s circle and his unwavering support, both financially and personally, have positioned him as a powerful figure in US politics. However, his exact role in the coming administration remains ambiguous, raising concerns about potential conflicts of interest given his companies’ significant government contracts.
