Tesla's (TSLA, Financial) stock price soared over 30% in just four trading days, pushing its market value back above $1 trillion. This dramatic rise led to substantial losses for hedge funds that had shorted the stock, with combined losses exceeding $5.2 billion. Analysts suggest the surge is partly due to Elon Musk's significant support for Trump's presidential campaign, which could benefit Tesla from relaxed regulations in industries such as autonomous driving.
On the same day in China's A-share market, Tesla-related stocks saw significant movement, with over 10 related stocks hitting their price ceilings. Tesla's CEO, Elon Musk, announced improvements to the Optimus robot design, aimed at facilitating mass production. Meanwhile, before the U.S. market opened, Tesla's stock had risen by 8%, reaching its highest pre-market price since April 2022. A notable investment firm, Wedbush, raised its target price for Tesla from $300 to $400.
Despite facing challenges common in the electric vehicle industry, such as trade tensions and low consumer demand, Tesla remains a standout stock in the green sector. Notably, hedge funds have been scaling back their short positions, with only 7% of them net shorting Tesla as of November 6, down from 17% in July. The shift coincided with Musk's endorsement of Trump in mid-July.
However, risks remain as the market reacts to the prospect of Trump's policies. Concerns arise that Trump may reduce clean energy incentives, which could negatively impact Tesla in the long run. Per Lekander, CEO of Clean Energy Transition, expects that within 12 to 18 months, Tesla might encounter difficulties due to Trump's environmental policies. He noted that a significant portion of Tesla's current stock price reflects the "Trump effect."
Elon Musk recently shared on social media that Tesla is advancing the design of its humanoid robot, Optimus, to prepare for mass production. The robot is currently performing tasks in factories, with its capabilities rapidly expanding. Analysts predict that the humanoid robot sector could see continuous growth, with possible small-scale production beginning next year.
Experts believe Tesla stands to benefit from future policy changes related to the auto industry and autonomous vehicles, given its dominant market share in the U.S. electric vehicle sector. Tesla's ongoing projects, like FSD commercialization and Robotaxi deployment, are likely to enhance demand expectations across related industries.
