(Reuters) – Tesla’s (TSLA) market value crossed the $1 trillion mark on Friday in a sharp rally, on growing bets on favorable treatment for CEO Elon Musk’s companies in return for his support for President-elect Donald Trump in his poll campaign.
Shares of the electric carmaker rose more than 6% to a more than two-year high of $315.56, after rising 19.3% through Thursday’s close. The company surpassed the $1 trillion valuation for the first time in more than two years.
The billionaire could push for favorable regulation of autonomous vehicles that Tesla plans and also ensure that the US National Highway Traffic Safety Administration (NSA) staves off potential enforcement actions related to the safety of Tesla’s current driver assistance systems, a source had said told Reuters.
Musk has focused on self-driving vehicle technology and abandoned plans to build an economy car priced below $30,000. However, development and regulatory hurdles have slowed the commercialization of such technologies.
“Tesla and CEO Elon Musk may be the biggest winners from the election results, and we believe Trump’s victory will help accelerate regulatory approval of the company’s autonomous driving technology,” said Garrett Nelson, senior equity analyst at CFRA Research.
Shares of Tesla rose in late October after the company reported a rise in quarterly profit margin, boosted by sales of its highly profitable Full Self Driving driver assistance software.
It has been the world’s most valuable automaker for years, trailing Japan’s Toyota Motor, China’s BYD and others by several hundred billion dollars.
Tesla’s shares trade at 93.47 times forward 12-month earnings estimates, compared with 38.57 for AI chip giant Nvidia, Microsoft’s at 30.77 and Ford’s at 6.29.
(Reporting by Akash Sriram in Bengaluru; Editing by Arun Koyyur)
