Tesla, the renowned electric vehicle manufacturer led by entrepreneur Elon Musk, has once again re-entered the exclusive trillion-dollar market capitalization club. This significant milestone comes after a period of volatility that saw Tesla shares plummet dramatically, losing over 70% of their value following a high of $407 per share in November 2021.
Now, after a steady recovery that began in spring 2023, Tesla’s stock has surged nearly 30% in the past week, with a notable push on Friday that catapulted the company’s market cap beyond the $1 trillion threshold.
What’s Driving the Surge?
The recent spike in Tesla’s stock price can be attributed in part to the U.S. presidential election. Investors are banking on a Trump presidency that they believe could benefit the automaker, despite former President Donald Trump’s historically skeptical stance on electric vehicles (EVs) and climate change policies. Elon Musk’s vocal support for Trump has only fueled these expectations.
Musk, who owns Tesla along with other ventures such as SpaceX, Neuralink, and The Boring Company, has invested considerable resources in supporting Trump’s re-election bid. His social media platform, X (formerly Twitter), has been at the center of this campaign, facilitating a multimillion-dollar push to secure Trump’s return to the White House. The implications of such a political alliance have ignited debates about the potential impact on the EV industry and environmental regulations.
Tesla’s Journey to a Trillion-Dollar Market Cap
Tesla’s return to the trillion-dollar club marks the second time the company has achieved this status. The automaker first crossed the $1 trillion market cap milestone in 2021, joining the ranks of tech giants like Apple and Amazon. However, economic challenges and investor concerns triggered a sharp decline in Tesla’s stock price throughout 2022, resulting in a loss of investor confidence and a steep drop in valuation.