Why Tesla will continue to rise — it’s not what you think

Years ago, when Biden took office, the leading electric vehicle company wasn’t invited to Washington’s EV Summit. “Yeah, seems odd that Tesla wasn’t invited,” the company’s CEO Elon Musk said in a tweet. 

In fact, Biden credited GM’s Mary Barra as being the EV industry leader. “Mary, you electrified the entire auto industry, you led,” Biden gushed — apparently unaware that GM delivered a paltry 26 EVs in Q4 2021.

And it only got worse. 

Lawsuits began to pile up. Did the Biden administration resort to using “lawfare” against Elon Musk? Hard to say. However, according to CNBC, under the Biden administration, “Musk’s companies are currently embroiled in a range of probes and lawsuits from federal agencies pertaining to matters including alleged securities law violations, workplace safety, labor and civil rights violations, violations of federal environmental laws, consumer fraud and vehicle safety defects… [spanning] 19 known ongoing federal investigations and lawsuits against Tesla, SpaceX and X, formerly known as Twitter.”

Possibly the most public court case was Chancellor Kathaleen McCormick of Delaware's decision in 2024 to kill Elon Musk’s $55 billion compensation package. This would leave the CEO of Tesla without any compensation from Tesla for six years. Bloomberg reports, “Musk logged thousands of hours at the helm of Tesla and increased its market value ten-fold.” 

Does this Delaware judge’s decision to halt Musk’s pay “smell” of lawfare?

And this decision is now under even more scrutiny after a vote at Tesla’s Shareholder Meeting (again) confirmed he deserves to receive his pay package. Recently, the Delaware judge stated, "I write to inform you that I aim to issue that decision before the end of this year." Hmmm, we’ll see how that decision unfolds.

At best, Tesla’s CEO has been slighted and snubbed by the Biden administration. At worst, Musk has withstood an unrelenting attack over the past four years. If these court cases, probes, and lawsuits begin to abate under the Trump administration, it’s likely that Tesla stock, as a long-term investment, becomes massively “de-risked” for its shareholders. It’s conceivable that Elon Musk, unburdened by these attacks, might be able to run the company more effectively.

In fact, the Trump team could create policies that would (gasp) actually be positive for Tesla. Case in point — this week, Bloomberg News reported Trump’s transition team has told advisers it plans to make a “federal framework” for full self-driving (FSD) one of the Transportation Department’s priorities, according to people familiar with the matter. This could help Tesla fast-track its rollout for robotaxis in the not-so-distant future.

That said, not all of Trump’s policies will help EV automakers. Already, Trump’s team communicated its desire to eliminate the $7,500 tax credit for electric vehicles. But even that could benefit Tesla. Elon Musk’s automaker has margins that can withstand losing the tax credit. Sure, it will sting but it’s likely that Detroit and Europe’s automakers need it more. It’s reasonable to assume Tesla could gain market share in the coming years as other automakers could slow EV production. 

According to Wedbush Securities analyst Dan Ives, Trump's policies should be a "homerun for Tesla… Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYD, Nio, etc.) from flooding the U.S. market over the coming years.”

In the end, Elon Musk should gain traction with the new administration considering his close relationship with Trump and his work on the forthcoming DOGE (Department of Government Efficiency). How this all impacts Tesla remains to be seen. But one thing is clear — shareholders of Tesla should feel some relief as the stock has been “de-risked” moving forward.

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Co-founder of EVANNEX, Matt Pressman owns both a Tesla Model S and Model 3 and remains a long-term investor in TSLA stock. He’s written extensively about Tesla and his work has been published in CleanTechnica, InsideEVs, and Teslarati. He’s also appeared numerous times on Fox Business News and PBS to provide his views on Elon Musk and Tesla.