Tesla (TSLA) Stock: Don't Get Too Happy

Tesla Motors Inc (NASDAQ: TSLA)

Tesla Motors had an incredibly strong day in the market today. As soon as the opening bell rang, the stock quickly found itself in the green. Since then, we’ve seen steady gains that have brought the stock higher. However, don’t get too excited. The truth is that Donald Trump could really throw a wrench in the company’s ability to grow. Today, we’ll talk about what we saw from the stock today, why Trump is a big danger to TSLA and others in the industry, and what to watch for ahead.

What We Saw From TSLA Today

As mentioned above, Tesla had an overwhelmingly strong day in the market today. When the opening bell rang, the stock found itself in the green. From there, we saw a slow and steady push up the hill to strong gains for the day. By the end of the trading session, TSLA climbed $7.30 per share or 3.93% to close the day off at $193.15 per share.

Why Trump May Turn Tesla Into Mush!

Donald Trump has been elected as the President of the United States, and soon, he will take on that role. Of course, any time a new President transitions into the Oval Office, there are going to be changes made to the economic and market landscape. However, it can be argued that there hasn’t been a President in history that has caused as much fear in many sectors; in particular, the automobile and renewable energy sector. Unfortunately, TSLA is dug deep into both of these sectors.

Think about it… what is Tesla’s flagship product? The answer is simple, the company makes its money by manufacturing and selling electric vehicles. As mentioned above, that’s not necessarily a good thing when Donald Trump is transitioning into office.

But Why Is Donald Trump Bad For The Company?

Ultimately, there are two big reasons that Donald Trump is horrible for TSLA. Those reasons include…

  • Donald Trump’s Views On Climate Change – Donald Trump has been very open about his views toward climate change. He doesn’t see as much of a threat in the burning of fossil fuels on the global climate. This is a big hit to Tesla. After all, a big piece of the income the company and many similar to it need to continue getting is government grants and other government funding, including tax breaks, for electronic vehicle manufacturers. When Trump fully transitions into office, this type of funding is likely to slim down to nothing. That’s millions of dollars that will soon be taken out of the bottom line for TSLA.
  • Donald Trump Doesn’t Like Vehicles Not Manufactured In The United States – Donald Trump has made it clear that he sees any American vehicle brands manufactured out of the United States as a bad thing. While Tesla’s primary manufacturing facility is in California, the company also manufactures many vehicles over seas. Under Trump’s plan, TSLA may be forced to pay large taxes to bring any vehicles manufactured over seas into the country.

What To Watch For Ahead

The bottom line is that Donald Trump’s campaign has been wild. While his presidency may lead to bad news for TSLA, we don’t know exactly what he plans on following through with and what will slip through the cracks. So, moving forward, keep a close eye on Trump’s moves for a signal as to where the stock is headed.

What Do You Think?

Where do you think TSLA is headed moving forward? Join the discussion in the comments below!