It was Trump’s near-assassination attempt in July that sealed the deal for Musk. Shortly after the shooting, he wrote on X: “I fully support President Trump and hope for his speedy recovery.”

Since then, the two have become increasingly connected.

While Musk controls companies like SpaceX (including Starlink) and the aforementioned X, Tesla investors have the most to gain – or lose – from Musk’s ties to Trump.

Trump has said in the past that electric vehicles are a “hoax” and that an EV transformation will destroy the American auto industry and destroy American jobs. He has also pledged to reverse Biden’s EV policy upon his return to office.

The Biden administration’s signature climate bill, the Inflation Reduction Act, introduced the $7,500 EV tax credit for consumer vehicles, including numerous others for commercial electric vehicles and battery manufacturing, among others.

With Trump in the White House and a Republican Party-led Senate and perhaps a House of Representatives, that huge boon for the EV industry and Tesla could be in jeopardy.

“I’m all for electric cars, but you also have to have all the alternatives,” Trump said in a speech interview in March. “First of all, they don’t go far, they cost too much, and they will all be made in China,” he said.

“You can’t just switch to electricity,” Trump said, adding that the power grid is not up to the challenges of production and distribution.

But Trump didn’t change his tune until August. “I am for electric cars. It has to be, you know, because Elon was very supportive of me. … So I have no choice,” Trump said at a rally.

“(Trump is) not necessarily a big believer in the concept of a government-led transition to electric vehicles,” iSeeCars analyst Karl Brauer told Yahoo Finance. “So it’s interesting to see that people feel that Elon’s relationship with Donald Trump will overcome a potential policy change, because I don’t think the EPA rules and expectations for electric vehicle sales and market share are realistic.”

Brauer believes the US will reassess and likely roll back strict EPA emissions requirements and federal EV tax credits, which would be negative for EV companies including Tesla.

But given Tesla’s competitive advantages in electric vehicles, this could actually be a positive for the company.

“Tesla has the scale and scope unparalleled in the EV industry, and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled with likely higher Chinese tariffs that would continue to drive out cheaper Chinese EVs. players (BYD, Nio, etc.) will not flood the US market in the coming years,” Wedbush’s Dan Ives wrote in a note earlier today.

“We believe a Trump victory could add $40-$50 per share to Tesla stock,” Ives added, noting the company could surpass $1 trillion in market capitalization “if autonomous/FSD becomes effective from 2025 accelerated.”

Tesla’s robotaxi ambitions, while still in their infancy and early testing phases, could be boosted by a Trump White House.

“We believe Trump’s victory will help accelerate regulatory approval of the company’s autonomous driving technology,” CFRA’s Garrett Nelson wrote on Wednesday.

Nelson significantly raised his price target on Tesla from $265 to $375 and upgraded the stock to Buy after the election, adding that the potential elimination of the EV tax credit would actually increase Tesla’s “competitive position” due to Tesla’s cost advantage in making EVs.

The robotaxi gambit is a bit more nuanced, as Tesla lags behind competitors like Google’s (GOOG, GOOGL) Waymo and GM’s (GM) Cruise, Brauer said.

Brauer added that Tesla stock has taken almost everything out of the traditional auto sector; Musk needs to find the ‘next big thing’ to unlock massive value for Tesla shareholders – and that is the robotaxi and self-driving technology.

And Trump could help these initiatives.

“Will Trump now support these technologies? More than under the previous government? Probably,” Brauer said. “I don’t think the previous administration was a big fan of Elon, so he might be able to get some help and have an ally in the White House to help him get to the next level beyond just electric vehicles. sales, and maybe that’s one of the things investors are hoping for.”

Tesla expects robotaxi testing to continue into 2025 and be rolled out as early as 2026. Perhaps now that Trump and new regulators have been installed, Tesla’s Cybercab robotaxis will hit the streets sooner than many think.

Pras Subramanian is a reporter for Yahoo Finance. You can follow him Tweet and on Instagram.

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