Tesla rises in overnight trading as Trump supporter Musk benefits

Shares of Tesla rose sharply overnight as investors bet that a potential Donald Trump victory would benefit the automaker’s key backer and CEO Elon Musk.

Tesla shares rose 12% in overnight trading on the Robinhood brokerage platform. According to NBC News’ count, the former president had gained a significant lead over Vice President Kamala Harris in the Electoral College votes, narrowing her path to victory.

Last month, Musk donated nearly $75 million to America PAC, the super political action committee he founded earlier this year to support the Republican candidate.

Trump has promised to appoint Musk to head a government efficiency commission if elected. During his speech at Trump’s rally at Madison Square Garden in late October, the SpaceX owner said that in this role he could save $2 trillion from the federal budget.

“Your money is being wasted and the Ministry of Government Efficiency will fix that,” he said at the rally. “We’re going to get the government off your back and out of your wallet.”

As of Tuesday’s close, the stock has significantly underperformed the broader market this year, with the stock up about 1.2% versus the S&P 500’s year-to-date gain of 21.2%.

In Tuesday’s regular session, Tesla rose 3.5%, breaking a six-day losing streak.

The move comes despite Trump being seen as unfriendly to clean energy stocks – a group that can include electric vehicle makers like Tesla.

“We believe a Trump presidency would be negative for the EV industry overall as EV rebates/tax incentives are likely to be eliminated. However, we see this as extremely positive for Tesla,” Dan Ives, managing director of Wedbush Securities, wrote in a note to clients.

“Tesla has the scale and scope unparalleled in the electric vehicle industry, and this dynamic could give Musk and Tesla a clear competitive advantage in an environment without electric vehicle subsidies, coupled with likely higher tariffs in China that would continue to squeeze out cheaper Chinese electric vehicle suppliers. ” (BYD, Nioetc.) will not flood the US market in the coming years,” he continued.