Tesla Value Hits $1 Trillion

By Douglas A. McIntyre Published Nov 11, 7:20AM EST

Tesla Value Hits $1 Trillion — © Production Cybertruck at Tesla Fremont Factory parking lot (CC BY-SA 4.0 DEED) by Lcaa9

24/7 Wall St. Insights

Tesla Inc.’s (NASDAQ: TSLA | TSLA Price Prediction) market cap jumped to over $1 trillion after the presidential election.
That was a turnaround from what appeared to be a rough year for the EV maker.
Also: Dividend legends to hold forever.

Elon Musk’s relationship with Donald Trump did something Tesla Inc.’s (NASDAQ: TSLA) position in electric vehicle (EV) sales worldwide could not. It took the company’s market cap to over $1 trillion. It is still, however, unclear exactly why on the day after the election. Tesla’s shares moved up 20%. They continued to rise throughout the week. By the end of Friday, they were up 25% for the year, which matches the S&P 500’s performance.

The jump was a turnaround from what appeared to be a rough year. Shares cratered in May because of weaker-than-expected sales and concerns about rivals in China. Even improved third-quarter figures only triggered a modest rally. For that quarter, Tesla produced approximately 470,000 vehicles and delivered about 463,000. Its revenue rose 8% to $25.2 billion. However, auto revenue was up only 2% to $20 billion. Earnings for the company rose 17% to $0.72 per share.

Tesla’s EV market share in the United States slipped below 50% for the first time this year. Its competition in China jumped as local manufacturers, led by BYD, posted sharp sales improvements. Additionally, the overall EV market globally, outside China, slowed.

On October 10, Tesla showed its first robotaxi, called the Cybercab. The production schedule for the car is uncertain. Its success will rely on its ability to be a completely autonomous vehicle, which no car company has been able to do yet. Tesla’s market cap remains tied to its ability to use AI and become the “full self-driving mode” industry leader. The head of Nvidia believes this case, and CEO Jensen Huang recently said, “Tesla is far ahead in self-driving cars.” Beyond the technology hurdle, the approval process to put these vehicles on the road will be complex and may have to be done state by state.

Why did the presidential election help Tesla’s stock? Will the U.S. government replace all its gasoline-powered cars with Tesla vehicles? No one knows.

Are Electric Cars Really Better for the Environment?

Follow 24/7 Wall St. on Google

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.