IRISH EXAMINER
Shares in Tesla have soared after an election win for Donald Trump that had been strongly backed by chief executive Elon Musk in the closing months of the presidential race.
Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors.
Tesla dominates sales of electric vehicles in the US with 48.9% in market share through the middle of 2024, according to the Energy Information Administration.
The firm’s shares jumped 13% on Wednesday while rival makers tumbled.
Mr Trump has proposed tariffs of 10% to 20% on foreign goods that would also impact electric vehicle maker’s outside the US, especially in China, and shares of EV makers there slid as well in US markets.
“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”
Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.
Mr Musk was one of Mr Trump’s biggest donors, putting more than 70 million dollars of his own money into the presidential run and other Republican causes. He also pledged to give away a million dollars a day to voters signing a petition for his political action committee.
Meanwhile, the price of bitcoin hit a new high and crypto-related shares rallied as investors bet that Mr Trump’s victory will be a boon for cryptocurrencies.
Bitcoin jumped nearly 8% in early trading, climbing above 75,000 dollars and smashing its previous record set in March. Other cryptocurrencies also soared, including ether, the world’s second most popular cryptocurrency after bitcoin, which rallied 8%.
Another token, dogecoin, rocketed as much as 18%. It is the favourite cryptocurrency of Mr Musk.
Mr Trump was previously a crypto sceptic but changed his mind and embraced cryptocurrencies ahead of the election.
He has pledged to make America “the crypto capital of the planet” and create a “strategic reserve” of bitcoin.
His campaign accepted donations in cryptocurrency and he courted crypto fans at a bitcoin conference in July. He also launched World Liberty Financial, a new venture with family members to trade cryptocurrencies.
