Elon Musk's Big Gamble: Will Tesla Stock Plunge if Kamala Harris Wins the Election?

Core Viewpoint - Tesla CEO Elon Musk's strong support for Donald Trump poses significant financial risks for the company, especially regarding its ambitions in autonomous vehicles [1][4][11] Group 1: Political Alignment and Implications - Musk's alignment with Trump is seen as ironic given Trump's history of criticizing electric vehicles and renewable energy, but Musk values the GOP's regulatory promises and free speech stance [2] - Musk's shift towards Republican support follows perceived slights from the Biden administration, particularly being excluded from discussions on electric vehicles [2][6] - The political landscape could impact Tesla's regulatory environment, especially if Democrats, including Vice President Kamala Harris, gain power, potentially leading to stricter scrutiny of Tesla's operations [6][11] Group 2: Autonomous Vehicle Strategy - Tesla is heavily investing in autonomous technology, recently introducing the "Cybercab," which Musk believes is crucial for the company's future [3] - The transition to autonomous vehicles requires federal and state regulatory approval, which Musk has indicated is essential for Tesla's success [4] - Current regulations prevent vehicles like the Cybercab from operating without traditional driver controls, and any exemptions for Tesla may be limited [5] Group 3: Financial Performance and Market Reaction - Tesla's stock trades at a high price-to-earnings ratio above 100, despite expectations of flat revenue growth this year, indicating a potential overvaluation [8][9] - Musk's forecasts of 20% to 30% production growth next year may not be sufficient if the transition to autonomy faces delays, which could negatively impact stock performance [9] - The market's reaction to recent events, such as the "We, Robot" presentation, demonstrates investor sensitivity to the company's progress in autonomous technology, with a notable 9% drop in stock price following the event [10]