Tesla stock continues to soar after the presidential election, pushing the company’s stock value to more than $1.1 trillion.
Artificial intelligence and autonomous driving should be the future of vehicle operations, but the federal government has been slow to support this technology. With a new regime in power, these key initiatives could be fast tracked, which means Tesla will see significant increases in vehicle sales and tech use with changes that had Full Self Driving technology back into the fold as a more common feature in new Tesla vehicles.
Musk’s support paid off
When the Republicans won the presidential election, Elon Musk’s support during the final months of the campaign seemed to have paid off significantly. Tesla stock is already up nearly 50% since the election, and eventually, the value hit a mark that doesn’t seem possible, reaching more than $1 trillion in market value. Much of this valuation is the expected use of AI and the continued development of autonomous technology. These tech features alone could account for the entire value of the company’s value.
In addition to the stock price increase, Elon Musk will serve in the new presidential administration. Its been suggested he could serve as the head of a commission to boost government efficiency.
Betting against Tesla didn’t pay off
Stock market investing is always a risky venture. Shortly after the election and the meteoric rise of Tesla’s price, many hedge funds that took a position betting against Tesla stock with the expectations of a Democratic party win lost significant value. In fact, Tesla shorts were down $8.72 billion in losses since the election.
This instant rally-induced short squeeze has forced out as many as 2.4 million shares that were shorted over the past few weeks. With the new administration preparing to take office, it doesn’t appear as though Tesla will lose value in the short-term.
Are fewer regulations a good idea?
Its pretty easy to see the value of deregulation of autonomous technology and AI as it relates to Tesla. This electric vehicle company has been at the forefront of technological advancements for many years, making it possible for other automakers to see the benefits of EVs. Tesla was the first company with EVs that could drive far enough to be useful and has developed technology that makes driving more enjoyable and safe on the road.
The Tesla Autopilot system, which is its package of driver assist safety features, has come under fire for several years due some fatal crashes involving failures of the cameras and sensors to recognize obstacles appropriately. In all fairness, the fault isn’t actually on the Autopilot system, but the driver behind the wheel. Despite the poorly chosen name, Tesla has never advertised this system as a full self-driving system, even in the more robust package, which is called Full Self-Driving.
Autonomous driving around the corner
Does the auto industry need to push toward autonomous driving? Maybe. Over the past couple of years, the increase in EV sales has slowed, despite more electric options and fewer gas-powered vehicles hitting the market. It could be that some consumers are waiting for the next big thing, which is likely autonomous driving technology.
Although no company has completely cracked the code of self-driving vehicles, Tesla is close. The automaker recently held an event at a movie studio lot that was set up as a closed course. The vehicles used to drive this course had no pedals or steering apparatus. This means there was no option for human intervention, and passengers were at the mercy of technology. This is the most aggressive approach to autonomous driving to date.
Tesla might not be ready to move their self-driving car to public roads, yet, but a closed-course test shows they are closer to real-world self-driving than most. That said, other companies, such as Waymo and Cruise, which have tested and driven autonomous vehicles on public roads for a few years, have had some issues. These vehicles have had human drivers aboard to take over when required, but some vehicles have still had a few accidents.
Sometimes, you have to break some eggs
The old saying, “to make an omelet, you must break some eggs” doesn’t apply to human life, which is what’s at stake if self-driving vehicles are unleashed on public roads. Although some regulations should probably be lifted to help spurn the development of AI and autonomous vehicle technology, there should still be a careful and thoughtful approach to minimize the loss of human life in the process.
Regardless of where the technology development takes the auto industry, Tesla stock has benefited greatly from the recent Republican win in the presidential election.
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