Tesla stocks rise 12% overnight as Elon Musk to benefit if Donald Trump wins US election

In late trading on the Nasdaq, shares were up 2.9 per cent at $258.70.

Tesla shares have also surged dramatically in Frankfurt trading on Wednesday, jumping up to 14 per cent as investors increasingly priced in a potential victory for Trump in the US presidential race.

The sharp rise comes as Musk has emerged as one of Trump's most prominent backers in recent weeks.

While Trump has expressed hostility toward transitioning to green energy and electric cars, Musk’s high-profile role could help Tesla.

Musk donated at least $132million (£102.32million) to the Trump campaign as of late October. Last month, he donated almost $75million (£58.13million) to America PAC, which is the super political action committee that he established earlier in the year to support the Republican nominee.

Trump has promised to appoint Musk as the head of a Government efficiency commission, if elected.

During his speech at Trump’s Madison Square Garden rally in late October, Musk, the SpaceX owner said he could cut $2trillion (£1.55trillion) from the federal budget in that role.

Musk said: "Your money is being wasted, and the Department of Government Efficiency is gonna fix that. We're going to get the Government off your back and out of your pocketbook."

His support has extended beyond financial backing, with Musk running a controversial $1-million-a-day giveaway in swing states through his PAC.

The sweepstakes, which offered cash prizes to voters who signed a petition supporting Constitutional amendments, faced legal challenges in Philadelphia but was ultimately allowed to proceed by a judge on Monday.

Musk has also appeared at Trump rallies, including the one in Madison Square Garden in October, where he described himself as "dark MAGA", referring to a hardline conservative interpretation of Trump's Make America Great Again values.

While Trump has historically expressed scepticism toward green energy and electric vehicles, analysts suggest Musk's high-profile role could benefit Tesla.

Dan Ives Wedbush Securities managing director wrote in a note to clients that while a Trump presidency might negatively impact the broader EV industry through reduced incentives, it could prove "a huge positive" for Tesla specifically.

Tesla's stock has substantially underperformed the broader market this year, with shares rising only 1.2 per cent compared to the S&P 500's 21.2 per cent gain.

The company broke a six-day losing streak on Tuesday, advancing 3.5 per cent in regular trading.

Cathie Wood, CEO of investment management firm Ark Invest, suggested the election could be a significant market catalyst.

In a video posted to X, she said: "We do expect the election to be some kind of trigger event. There could be a great deal of volatility no matter who wins. But innovation gains traction during tumultuous times."

The overnight rally extended beyond Tesla, with crypto exchange Coinbase Global shares opening up 16 per cent in Frankfurt, while Bitcoin surged to record highs above $75,000.

Trump Media stock also experienced volatile trading, with trading halted three times during Tuesday's regular session due to rapid price changes.