The Trump trade is back on as a nod from the former president boosted Tesla (NASDAQ:TSLA) stock.
CEO Elon Musk has promised to donate $45 million per month to the former president’s campaign, for a total of about $135 million.
TSLA stock was up almost 1.25% over the weekend after losing 4% of its value on July 19. It opened this morning at $244, its market capitalization rising to $771 billion.
Trump Likes EVs Now?
Despite his kind words for Musk, Trump still isn’t a fan of electric vehicles (EVs). He said last week that if elected, he would end the “Electric Vehicle mandate” immediately, which would likely kill the current $7,500 rebate. He also supports expanded oil drilling, hoping to drop the price.
However, according to Barron’s, Trump’s stance would only cement Tesla’s lead in the U.S. market. The company sold 164,000 EVs in the U.S. during the second quarter, against 23,000 for second place Ford Motor (NYSE:F). Also, while Tesla is expected to earn $1.2 billion for the quarter, making those EVs, Ford lost an estimated $1.3 billion.
Tesla is due to report its second quarter on July 23. The focus will be more on the cars’ Full Self-Driving (FSD) mode than on the sales figures. Analysts will be looking for profits from its energy storage business.
Musk also seems to be focusing less on the car business than on artificial intelligence (AI) and robots, which seem like hotter businesses.
Going forward, Tesla hopes to increase its global market share with megacasting. That means casting entire car bodies in just two pieces to reduce weight and vibration. Tesla also faces new challenges in its home market from Rivian (NASDAQ:RIVN) and General Motors (NYSE:GM). The Rivian R1 truck continues to get strong reviews, and the company now has capital from Volkswagen (OTCMKTS:VWAGY) to continue its expansion.
TSLA Stock: What Happens Next?
A CEO’s politics seldom move the needle on sales and profits, especially for a $100 billion business. Tesla’s fundamentals will matter more over the long run.
On the date of publication, Dana Blankenhorn did not hold (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.
On the date of publication, the responsible editor held a LONG position in F stock.
