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While Tesla has been winning a litany of stock price target upgrades in recent days, spurred by Elon Musk's close association with the incoming Trump administration and the benefits that Tesla will likely reap vis-à-vis the regulatory framework for autonomous vehicles, the full-fledged politicization of Elon Musk's persona does carry a few drawbacks, not to mention the indirect hits to Tesla's core auto business from Trump's anti-EV stance.
As an illustration of Elon Musk's growing clout in Washington, the CEO of Tesla will head the Department of Government Efficiency (DOGE) with Vivek Ramaswamy in the incoming Trump administration, all in a bid to try to slim down some of the US government's bloat.
The Speaker of the House need not be a member of Congress . . .
Nothing would disrupt the swamp more than electing Elon Musk . . . think about it . . . nothing’s impossible. (not to mention the joy at seeing the collective establishment, aka ‘uniparty,’ lose their ever-lovin’…
— Rand Paul (@RandPaul) December 19, 2024
Yet, there is apparently an appetite for Elon Musk's further ingress into active politics. Consider Senator Rand Paul's recent X post, where he calls for Elon Musk to be appointed as the next US House speaker.
We view KY Senator Rand Paul’s tweet yesterday suggesting Elon Musk be named U.S. Speaker of the House as a non-starter. Elon already functions as President-elect Trump’s “first friend,” and spending a huge chunk of time in dysfunctional Washington would be viewed negatively by… https://t.co/1EGctuD7qI
— Gary Black (@garyblack00) December 20, 2024
Seasoned Tesla analyst Gary Black has taken a dim view of this proposal, terming it a net negative for Tesla, given the need for Musk to then spend "a huge chunk of time in dysfunctional Washington." Also, if Musk does somehow become the speaker, he would likely have to pare down his material stake in Tesla, leading to significant bouts of weakness for the stock.
In the same vein, Tesla's core EV business will likely not remain unscathed from the generally lukewarm attitude of the incoming Trump administration towards electric vehicles.
For instance, Trump has already declared that he would likely end the $7,500 federal EV tax credit. While the prevailing rationale on Wall Street maintains that the tax credit removal would ultimately end up a net positive for Tesla, especially as it would decimate the EV giant's competition in the US, the step will prevent Tesla from introducing its new Model Q, also called the Model 2, at a sub-$30,000 price point.
Deliveries next year won't be anywhere near 2,285,000 units, as you estimate in your table. It will be much less.
The $7,500 tax credit in the US will soon be canceled. The shorter Model Y (aka Model 2) enters production in early July 2025 and will start at $37,490 for the…
— Troy Teslike (@TroyTeslike) December 20, 2024
To wit, Troy Teslike, one of the most accurate analysts when it comes to Tesla's quarterly delivery count, believes that the new Model Q will start retailing from $37,490 after factoring in the removal of the $7,500 federal EV tax credit. Moreover, he also expects Tesla's annual deliveries to remain flat at 1.8 million units in 2025.
$TSLA sales down 40% YOY in Europe and Model Y no longer top selling car in Europe (surpassed by Dacia) pic.twitter.com/xzRSNj01Bn
— SixSigmaCapital (@SixSigmaCapital) December 19, 2024
This comes as Tesla continues to contend with brand image issues in the EU and fierce competition in China from new entrants.
Companies will pay Tesla so much $$$ to provide their employees transportation to work. At $0.50/mile vs. Uber's $3.00/mile, a 20 mile round trip would cost $10 per day vs $60.
The employer wins because their employees are more likely to come into work and more productive on…
— Xander Johnson (@XanderBJohnson) December 16, 2024
It is hardly a surprise, therefore, that Elon Musk sees Tesla's future in the autonomous driving sphere as well as the still-in-development Optimus humanoid robot.
*TESLA IN TALKS WITH CITY OF AUSTIN TO DEPLOY DRIVERLESS FLEETS - BLOOMBERG
Email records show that Tesla employees have been in contact with the City of Austin's autonomous vehicle task force since as early as May of this year, in order to establish safety guidelines for a… pic.twitter.com/yydh0kTmNL
— Stock Talk (@stocktalkweekly) December 19, 2024
Of course, Tesla's autonomy-related efforts continue to remain a bright spot for the company. Its latest FSD v13.2 is already at the 10,000 miles per critical intervention threshold, as per the company's own claims, and rapidly approaching parity with Waymo, which currently averages around 17,000 miles between critical interventions.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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