Tesla Stock Soars Following Donald Trump’s Endorsement

Tesla’s stock experienced a positive surge following Donald Trump’s endorsement of the brand yesterday.

After closing at $230.58 on Tuesday, shares opened approximately seven percent higher on Wednesday morning, as reported by Yahoo Finance.

Tesla’s stock rose by 3.8 percent on Tuesday, rebounding after a 15 percent drop on Monday, which was influenced by U.S. stocks reacting to President Trump’s ambiguous comments regarding a potential recession.

On Tuesday, Tesla delivered five vehicles to the White House South Lawn, which Trump inspected prior to issuing a warning to protesters against Musk’s participation in the administration at various dealerships nationwide.

On Monday, Trump took to Truth Social, condemning the protests at Tesla dealerships as “illegal and collusive,” while vowing to buy a “brand new Tesla [Tuesday] morning as a demonstration of confidence and support for Elon Musk, a truly great American.”

Why It Matters

Tesla’s stock has been struggling in recent weeks, attributed to heightened foreign competition, sluggish sales, and the divisive impact of the CEO’s political activities on its customer base.

Trump’s emphatic endorsement of a brand affiliated with a political ally has raised ethical concerns, with critics labeling it a potential “government bailout” and accusing him of misusing the presidential platform.

What To Know

Since Trump’s inauguration, Tesla’s stock has faced challenges, although it previously soared to an all-time high of $479.86 in December following a post-election rally.

As of Wednesday morning, the stock was down 39 percent year-to-date, and had dropped 46 percent since the inauguration.

While Trump’s support could provide the company with a much-needed lift, the public endorsement of a private company raises potential ethical issues regarding the conduct expected from government officials.

According to the Office of Government Ethics, a federal employee must not use “public office for his own private gain or for the endorsement of any product, service or enterprise, or for the private gain of friends, relatives, or persons affiliated with them in a nongovernmental capacity.”

What People Are Saying

Elon Musk commented to reporters on Tuesday: “Thanks to the excellent policies of President Trump and his administration, and as an act of faith in America, Tesla will double vehicle production in the U.S. over the next two years. We will double.”

When asked if his purchase of a Tesla could positively impact the company’s sales and stock prices, President Trump replied: “Well, I hope it does.”

Following Trump’s endorsement, Fox News host Sean Hannity stated: “Tesla is the MOST American-made car in the country! #AmericaFirst #AmericanJobs!!”

Democratic Senator Chris Murphy remarked on a video of Trump and Musk entering a Tesla on Tuesday, saying: “Just because the corruption unfolds publicly doesn’t mean it’s not corruption.”

MSNBC’s Chris Hayes referred to Trump’s endorsement of Tesla and his warnings to protesters as “a government bailout of sorts.”

What Happens Next?

Despite the challenges of declining sales and sluggish stock trends, numerous analysts maintain a positive outlook for Tesla. A recent note from Morgan Stanley highlighted that the company is well-positioned to capture a substantial share of the expanding market for autonomous vehicles and AI-powered robotics.

During the company’s late January earnings call, Musk stated: “I envision a future where Tesla becomes the most valuable company in the world by a significant margin,” adding, “There is a potential for Tesla’s value to surpass that of the next top five companies combined.”