Last week, President Joe Biden praised Ford (NYSE:F) and General Motors (NYSE:GM) for their contributions to the electric vehicle (EV) sector. Many fans of the field felt that Tesla (NASDAQ:TSLA) should have been included in the list. Elon Musk certainly thought so. While TSLA stock has traded well this week, the company has received bad news in the form of U.S. Securities and Exchange Commission (SEC) subpoena. Additionally, the company has seen multiple recalls since February began.
Those headwinds don’t matter though, because Biden finally acknowledged Tesla’s electric vehicle dominance.
Biden Drives TSLA Stock Higher
Tesla’s mention came during a speech in which Biden reinforced his commitment to electric vehicles as the future of transportation. While he still described Ford and GM as “iconic companies” he noted that Tesla is the nation’s “largest electric vehicle manufacturer.”
Simply a mention from Biden is likely not enough to send TSLA stock up by too much. Even the president doesn’t have the power to move markets with just a tweet that Musk wields. That said, the stock is still trading well. As of this writing it is up 1.5% for the day, roughly in line with the S&P 500.
Why It Matters
When it comes to evaluating Biden’s effect on TSLA stock, investors should take a macroeconomic perspective. It may not have much effect on the stock in the short term, but the president of the United States still acknowledged the company as the leader of its industry. Any doubt that Tesla is significantly ahead of its competitors in the EV race should be quieted.
It has also been reported that Biden’s initial refusal to acknowledge the company was driven by his viewing it as anti-union. Musk has also mocked Biden on several occasions. Biden was clearly reluctant to validate Tesla’s contributions to American industry. The fact that he has opted to do so, however, is a testament to Tesla’s importance and staying power.
Biden’s acknowledgement comes at a good time for Tesla, too. While TSLA stock wasn’t too affected by the recent recalls, SEC subpoenas don’t inspire investor confidence.
What It Means
Overall, investors have plenty of reason to regard TSLA stock with optimism as the new year takes shape. The company has seen its share of controversy recently, but nothing it hasn’t been able to shake off.
This shows that, on its own, Tesla can push through any drama. With Biden’s backing, the bull case for Tesla is even stronger.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.