The post-election Trump bump has come and gone. Along the way, no US stock was more powerfully buffeted than Tesla. Elon Musk’s carmaker had, at one point in December, gained $733bn in market capitalisation since the US election, more than any other company in the S&P 500. Its 54 per cent drop since then is also the greatest fall among index members. Musk is the reason, in both directions.
Even before Donald Trump won the presidential vote and hired the world’s richest man as his efficiency tsar, Tesla — then worth about $800bn — was valued more like a moonshot than a carmaker. The company was trading at around 80 times expected earnings for 2025, putting it in the top 3 per cent of US-listed companies worth more than $1bn, according to Capital IQ data. The median price-to-earnings multiple at the time was 15 times.
Not even the most far-fetched automotive estimates justified that. Before the election, Lex calculated that Tesla’s car business was worth around $240bn, based on a generous estimate of 6mn vehicles by 2030. The remaining $560bn or so looked like a heady cocktail of hope about future projects, from self-driving taxis to humanoid robots.