With the holidays almost here and a new year just around the corner, many traders and investors are preparing to take stock of their portfolios and consider how to optimise them for 2025. It’s been a whirlwind 12 months or more for the US stock market, with both major indices (Nasdaq 100 and S&P 500) recording over 25% YTD gains — and this despite rampant geopolitical uncertainty and multi-year-high interest rates! Even though equities markets have seen a good general performance, there have certainly been some big individual winners, too. AI chipmaker Nvidia made major headlines in the summer and now sits at a cool +183% YTD. Meanwhile, Elon Musk’s flagship brand, Tesla, may have only managed around +75% over the same period, but the electric carmaker’s future looks even brighter for a range of reasons.
With Musk already named one of President Trump’s right-hand men selected to head up the new Department of Government Efficiency, it’s reasonable to expect that the political environment will prove especially favourable to Tesla over at least the next four years. The acceleration of the green agenda globally, coupled with growing tensions in key oil-producing regions — not to mention the company’s own strong performance — are also positive factors for TSLA. In this piece, we’ll look at how this combination of external and internal factors could affect the stock’s price in 2025 and beyond.
Inside man
As we’ve already touched upon, Tesla CEO Elon Musk has been identified by incoming President Trump as key to his administration’s success. The soon-to-be Commander-in-Chief sees Musk’s undeniable business prowess as something that can be applied to optimise the US government’s bloated and inefficient state infrastructure. As part of Trump’s flock, it’s unlikely that the Republican will enact any laws liable to harm TSLA.
In fact, the pledge of 25% tariffs on Mexico already presents a huge potential boon for Tesla’s already swelling stock price. The big three US carmakers Chrysler, Ford, and General Motors, German giants Mercedes, Volkswagen, and BMW, and even Asian Model 3 competitors Nissan and Kia all have or are planning Mexican factories producing cars for the US market. The price advantage this gives both the luxury and budget manufacturers over US-made Teslas will be slashed significantly, which can only be good news for the Freemont, California-based automaker’s stock price.
Since Trump won the election, TSLA is up over 90%. Indirectly, yet also significantly, Trump’s strong anti-Iran policy in the Middle East is likely to lead to further conflict in this oil-rich region, pushing up the price of ICE fuel. This will make electric vehicles even more attractive, especially taken together with the generous green subsidies, faster charging, and longer-range batteries now available.
Top management
When looking at the non-business-related fundamentals working in TSLA’s favour and considering the larger-than-life crypto bro image of founder and CEO Elon Musk, it’s easy to overlook just how well-managed Tesla actually is. The company’s Freemont, California plant, which is now the US’s biggest car manufacturing facility, hit full capacity this year and produces up to 500,000 vehicles annually. Despite many years of struggling, Tesla finally became profitable in 2020. For the year ending 2024, it reported net income of $2.17 billion. Though this represents a dip from 2022 and 2023, it is largely due to increased R&D investments in AI-based self-driving technology.
Much like its decision to remain in the US despite higher costs of operation, this less-travelled and more expensive path could pay huge dividends in the future. Between self-driving taxis and logistics vehicles, the implications of fully functional autonomous driving technology would be almost impossible to quantify. The company’s sub-$30,000, two-passenger Cybercab is tipped to go into production in 2026. If approved before the end of Trump’s term, the potential upside for TSLA would be massive. In addition to chasing more revenue, Musk is also trying to improve competitiveness through aggressive cost-cutting measures like simplified vehicle design and large-scale staff layoffs. All things considered, the future looks bright for Tesla, even at today’s stock price of $430.60.
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Tesla Trumps the Competition, but the Best Is Yet to Come was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.