Donald Trump's election victory is expected to bring a strategic boost to Tesla Inc (NASDAQ:TSLA), with Wedbush analysts projecting major policy shifts that could favour the electric vehicle (EV) maker.
According to the investment bank, Trump's administration is likely to scale back federal EV rebates and tax incentives, which would impact much of the industry.
However, its analysts see this as an advantage for Tesla, which holds a dominant market share and could thrive in a subsidy-free environment, potentially creating hurdles for smaller EV competitors.
A shift in trade policy under the new president, including higher tariffs on China, could also benefit the carmaker by reducing competition from lower-cost Chinese electric car makers such as BYD and Nio.
Wedbush suggests this may reduce the inflow of Chinese EVs into the U.S. market, offering Tesla a stronger domestic position.
Additionally, Trump's administration may fast-track autonomous vehicle regulations, potentially accelerating Tesla's timeline for full self-driving (FSD) technology.
If these advancements proceed, Wedbush estimates they could add as much as $40 to $50 per share to Tesla's stock value by 2025, as the company moves closer to achieving a lead in autonomous capabilities.
Underling the good news narrative, shares in the electric vehicle giant were up 3.5% premarket at $251.44, adding almost $28 billion to the value of the business.
In the Wedbush note, analysts indicated that a Trump administration would likely prioritise artificial intelligence (AI) initiatives, potentially leading to a significant boost for the US tech sector.
The note suggested that his policy agenda would likely include major government-led AI initiatives, especially within the Department of Defense, which could benefit key technology companies like Microsoft, Amazon, and Google.
Additionally, the increased focus on AI could provide a "major tailwind" for specialized AI firms such as Palantir.
The analysts noted that while some aspects of the Inflation Reduction Act might be revised under Trump -- potentially affecting certain tech companies -- the emphasis on AI development would remain a central focus, likely to drive growth and innovation across the US technology landscape.