Is Tesla Headed for a Buying Opportunity? Spoiler Alert: Yes, Regardless of Who Wins – Trump or Harris

Trump: Fast Tracks, Sharp Turns, and Deregulation

If Trump reclaims the Oval Office, deregulation is likely to be a central theme. For a tech innovator like Tesla, that sounds like freedom. The company has big plans for its autonomous vehicles, and with less regulation, it’s possible the robo-taxi dream could move closer to reality. Imagine a world where Tesla’s “hands-free” driving ambitions are accelerated to the point that “steering wheels” are just an optional feature. All Trump would need to do is sign off on a regulatory rollback, and the market could see Tesla surge ahead in the self-driving space. And knowing Trump, he might appreciate the Musk ethos of “move fast, break things”—just with fewer layers of red tape.

However, while less regulation could mean rapid innovation, it also raises the risk of unintended consequences. If Tesla’s autonomous tech experiences… let’s call them “teething issues,” the PR fallout could be real. Think of it this way: self-driving cars are revolutionary, but they’re also tricky business. With Trump’s laissez-faire approach, Tesla’s path might resemble one of Elon’s rocket trajectories—upwards with the occasional bumpy landing.

Tax Credits: A Bittersweet Situation

Trump’s stance on electric vehicle tax credits is more of a double-edged sword for Tesla. On one hand, cutting tax credits could make Tesla’s cars less accessible, potentially slowing down sales. On the other, it could be a wake-up call to start turning profits without leaning on the so-called “Keep Tesla Profitable Fund” (or, as others call it, zero-emissions credits). Tesla’s energy division, which is really banking on incentives for products like its Mega Packs, could also be affected. Just one Mega Pack currently racks up an impressive $124,800 in tax incentives. If that goes away, Tesla might have to add some “free merch” to the pitch—maybe a Tesla water bottle with each purchase?

There’s also China to consider. Trump’s trade policies might slow China’s entry into the U.S. EV market, offering Tesla some respite from competition on its home turf. But Chinese automakers are pivoting toward Latin America and other markets, so any competitive buffer Trump provides might just be a short-term gain.

Enter Harris: Steady Gains and More Guardrails

Now, let’s imagine a Harris administration. For Tesla, this would mean a continuation of green initiatives—hello, electric vehicle tax credits! A $7,500 tax credit on a Model 3 could certainly make the idea of owning a Tesla even more tempting to the average consumer. From Tesla’s perspective, these credits are invaluable, helping to boost their margins and keep their revenue streams healthy as the company continues to grow. With Harris, you can count on tax incentives sticking around a while longer, essentially a government-sponsored Tesla stimulus package.

However, with Harris, Tesla’s bound to face more scrutiny when it comes to innovation in autonomous driving. While Harris might keep the incentives flowing, her administration could bring a regulatory leash along for the ride. It’s not so much about putting the brakes on Tesla’s self-driving dreams, but she’d definitely apply a little pressure on the brake pedal. The likely scenario? Harris would focus on ensuring safe deployment of autonomy, with new standards that could make Elon feel like he’s being asked to babysit his AI in the back seat.

And when it comes to Musk’s grand expansion into everything from solar roofs to next-gen batteries, he might face a few more guardrails as well. While Harris is likely to approve a friendlier regulatory environment for clean energy, she won’t tolerate monopolistic ambitions. Musk could find himself under the microscope if Tesla’s market share continues its growth. But unlike Trump, who’s unlikely to hit the brakes on Big Tech’s biggest players, Harris may prioritize protecting competition in the EV space. The result? A steady flow of green incentives but with more strings attached.

The Valuation Factor

So, how does Tesla’s stock valuation hold up under these two potential administrations? With a PEG ratio already in the stratosphere, Tesla’s price tag is a bit like a “charming fixer-upper”—a lot of promise, but a lot of assumptions built into the sticker price. Under Trump, the prospect of looser regulations is attractive, but the potential loss of tax credits could dampen some of Tesla’s profitability. That leaves the company scrambling to find alternative revenue streams or implement cost adjustments to offset the change.

In a Harris scenario, Tesla’s revenue might look more stable, thanks to the tax credits and energy incentives that would remain in place. However, additional oversight might constrain Musk’s more ambitious projects in the short term, as government-imposed guardrails slow the pace of innovation just a bit. For example, full self-driving could take longer to deploy as Tesla jumps through more regulatory hoops, which isn’t exactly what Musk prefers. Then again, who’s going to tell the guy that Mars colonization isn’t priority #1 for the Department of Transportation?

Final Thoughts

So, who’s better for Tesla? While both candidates offer intriguing possibilities, the answer likely depends on your own investing tolerance. If you can handle some turbulence and believe that Tesla will continue to innovate regardless of policy shifts, either candidate presents interesting entry points.

A Trump victory could see Tesla surging on deregulation hype, though he could simultaneously pull the rug out from under them by cutting tax credits. A Harris win would offer a more stable, incentive-heavy landscape but could come with extra regulatory oversight. Either way, Tesla’s future seems tied less to the nuances of government policy and more to Musk’s relentless drive to build the future he envisions. After all, if Musk has taught us anything, it’s that he’ll push forward no matter what obstacles lie in his path—whether it’s regulatory tape or Mars’ pesky atmosphere.

At the end of the day, Tesla’s prospects depend as much on Musk’s drive as on the policies of either leader.