For the first time since April 2022, Tesla’s *market cap broke through the $1 trillion ceiling. The multinational electric vehicle manufacturer, which has the world’s richest person at its helm, is enjoying a mega rally after Donald Trump’s second election victory. Elon Musk backed Trump during his election campaign.
* Market cap, which stands for market capitalization, is the total value of all a public company’s outstanding shares. It is calculated by multiplying the current share price by the total number of outstanding shares (shares that have been issued).
By late morning, Tesla shares reached $319.44, an increase of 7.6%. Over the past three days, the company’s share price has risen by 24%.
On August 7, 2024, Tesla was valued at $612.60 billion, and now it is worth $1.031 trillion. Therefore, it is now worth 1.683 times what it was in August; its valuation increased by 68.3%.
Tesla is among a small group of companies valued at more than $1 trillion, including several tech firms like Microsoft, Apple, Meta, Alphabet, Nvidia, and Amazon.
Musk Got richer
On Friday, Musk got $10 billion richer during Tesla’s rally, pushing his net worth to over $300 billion. He is now more than $70 billion richer than the world’s second richest person, Larry Ellison, whose net worth stands at $230 billion, according to Forbes.
A Strong Trump Backer
Musk endorsed candidate Trump in July 2024 with a donation of $120 billion towards his election campaign. In a victory celebration photo, Musk appeared next to Trump and his family.
In his victory speech, Trump announced, “We have a new star. A star is born – Elon!”
Trump has floated the idea of having Musk in his cabinet, perhaps as the “secretary of cost-cutting.”
Musk claimed he could slash $2 trillion from the federal budget without explaining how.
Despite Trump’s history of anti-EV rhetoric, Musk’s Tesla is bound to benefit under his presidency.
As a Trump ally, somebody who helped him win, Musk’s company (Tesla) could benefit in the following ways:
- Mega tariffs on Chinese imports, including its cheap EVs, would give Tesla the opportunity to gain more market share.
- The elimination of electric vehicle tax credits. Smaller EV makers would find it difficult to gain a footing without the tax credit, which would be great for Tesla.
- Tesla’s self-driving vehicles could reach the market much faster if Trump fast-tracked regulatory approval.
Musk has been developing self-driving technology after abandoning plans to create an economy electric car priced at less than $30,000. However, regulatory obstacles have slowed and postponed the commercialization of this technology.
Tech’s Shift to the Right
Musk has been a longtime champion of renewable energy. He used to donate to political candidates in both parties. He once described himself as “a moderate.”
Musk’s alliance with Trump is definitely a rightward shift, and he is not the only one. Amazon’s Andy Jassy, Google’s Sundar Pichai, and Apple’s Tim Cook made calls to Donald Trump during the last weeks of his election campaign.
Leaders of Blue Origin, an aerospace company owned by Jeff Bezos, met Trump just two weeks ago. Why all this cozying up to the candidate? To mend fences?
USA Today quoted Dan Schnur, who teaches strategic political communications at the University of Southern California and the University of California, Berkeley, as saying:
“If Donald Trump were Willy Wonka, Elon Musk just won all five golden tickets. Trump not only respects him, not only does he revere him, but Trump feels like he owes him. Add that up and it’s hard to imagine Musk writing a wish list that Trump won’t rubber stamp.”
About Elon Musk
Elon Reeve Musk was born in Pretoria, South Africa, on June 18, 1971. He is 53 years old. He has a South African, US, and Canadian passport.
He earned a Bachelor of Arts in Physics from the College of Arts and Sciences, and a Bachelor of Science in Economics from the Wharton School, both at the University of Pennsylvania.
Musk is/was involved with the following companies:
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SpaceX
Industry: Aerospace.
Position: Founder, CEO, and Chief Engineer
Involvement: Founded
-
Tesla, Inc.
Industry: Electric vehicles, clean energy. Position: CEO and Product Architect
Involvement: Tesla was founded in 2003 by Martin Eberhard and Marc Tarpenning. While Elon Musk wasn’t the initial founder, he became a significant investor and joined the company’s board in 2004. In 2008, he became the CEO of Tesla and has been instrumental in driving the company’s growth and success.
-
X (formerly Twitter)
Industry: Social media
Position: Owner, CTO (Chief Technology Officer), and Executive Chairman
Involvement: He acquired the company.
-
The Musk Foundation
Industry: Non-profit (focuses on sustainability, renewable energy, and space exploration)
Position: President
Involvement: Founded
-
Neuralink
Industry: Neurotechnology
Position: Co-founder
Involvement: Co-founded
-
OpenAI
Industry: Artificial intelligence research and development
Position: Co-founder
Involvement: Co-founded
-
Zip2
Industry: Software (online city guide)
Position: Co-founder
Involvement: Co-founded
-
X.com (part of PayPal)
Industry: Financial services (online payments)
Position: Co-founder
Involvement: Co-founded (X.com later merged with Confinity to become PayPal)
-
The Boring Company
Industry: Infrastructure (tunnel construction)
Position: Founder
Involvement: Founded
Conclusion
Elon Musk, who once considered himself politically moderate, supported Trump during the election campaign. Many believe this was to benefit his companies, especially Tesla and possibly SpaceX as well.
Whether his strategy will prove worth the effort and money remains to be seen.
Since Trump’s victory, Tesla’s market cap has topped the $1 trillion mark and Musk’s net worth has surpassed $300 billion.
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