Tesla's (TSLA) CEO took to X, his social-media platform, to rail against a stopgap measure that congressional leaders introduced to keep the government running for the next three months.
The 1,500-page measure has dozens of add-ons, including a provision that puts an automatic cost-of-living increase into effect for lawmakers, who have not received a pay raise since 2009.
"How can this be called a 'continuing resolution' if it includes a 40% pay increase for Congress?" Musk wrote on Dec. 18.
The average member of Congress earns $174,000 a year, while party leaders pull in more. If the measure passes, lawmakers could receive a raise of up to 3.8%, or about $6,600, annually.
"Stop the steal of your tax dollars!" Musk declared in another post. "Call your elected representatives now. They are trying to railroad this thing through today!"
Musk will likely have a lot more say about the use of tax dollars come Jan. 20, when President-elect Donald Trump returns to the White House for a second term.
Musk, the richest person on Earth, and the venture capitalist and former presidential candidate Vivek Ramaswamy will lead a temporary agency dubbed the Department of Government Efficiency, or DOGE, that seeks to cut government spending.
President-elect Donald Trump and Elon Musk watch the launch of the sixth test flight of the SpaceX Starship rocket on Nov. 19, 2024, in Brownsville, Texas. Trump tapped Musk to lead a Department of Government Efficiency alongside investor Vivek Ramaswamy.Brandon Bell/Getty Images
Tesla shares have soared since election
Musk has suggested that DOGE — a play on dogecoin, a cryptocurrency that Musk has touted — could help cut the federal budget by up to $2 trillion by reducing waste, abolishing redundant agencies and downsizing the federal workforce.
Ramaswamy has said the advisory commission may eliminate entire federal agencies and reduce the number of federal employees by as much as 75%.
The largest donor in the 2024 election cycle, Musk poured at least $600 million into putting Trump back into power.
Tesla shares have skyrocketed since Trump's election. They hit a record on Dec. 17 after Mizuho Securities upgraded the electric-vehicle maker to outperform from neutral and more than doubled its price target to $515 a share from $230.
Analyst Vijay Rakesh cited several factors for the positive outlook, including regulatory tailwinds for autonomous driving, potential benefits from new Trump administration policies, and Tesla's competitive positioning in the electric vehicle market, according to Investing.com.
"We see TSLA benefiting from favorable legislative exposure from CEO Musk's alignment with the Trump administration," Rakesh said.
Rakesh said he expected Tesla's strong supply chain and balance sheet, along with potential new policies such as the sunsetting of U.S. EV lease credits, to prove advantageous for the company.
He also suggested that Tesla's autonomous technology is advancing toward broad commercialization.
Meanwhile, Electrek reported on Dec. 16 that new Tesla vehicles are experiencing self-driving computer failures.
Wide-ranging features powered by the computer, like active safety features, cameras, GPS, navigation, and range estimations, fail to work, Electrek said.
The cause is still being investigated, but a source told the website that one possible cause is a low-voltage battery short-circuiting the computer during camera calibration.
The process adjusts the vehicle's cameras to ensure they can detect objects and obstacles on the road with precision..
Barclays analysts said on Dec. 18 that the post-election rally in Tesla shares reflects a "sharp disconnect" between the stock and the company's fundamentals.
“‘Explain to me what's happening with Tesla stock’ has been far and away the most prevalent question we've received from investors following the US election," the investment firm said in a research note.
Technicals and options are playing an outsized role in the rally, the firm said. Barclays says Tesla shares are now best compared with crypto, embodying "animal spirit" factors such as belief in disruptive potential, speculative enthusiasm, and scarcity since Tesla is the only publicly traded entity Musk controls.
Retail interest in the stock is critical, with 30% of Tesla’s shares outstanding held by retail investors, Barclays said.
Analysts cite the 'Elon Premium'
“Tesla remains the 'OG meme stock,'” the firm stated, using the slang term for "original gangster," which describes the original or originator of something.
The past six weeks "serve as a reminder that Tesla remains a narrative king within the market, with fundamentals cast aside," the firm contended.
While 2025 consensus earnings estimates are up slightly in the past six weeks, Tesla's multiple has increased to a "frothy" 145 times 2025 numbers, up from 80 times immediately before the election, Barclays pointed out.
The firm called Trump's victory "not as positive as you'd think" for Tesla's fundamentals.
Trump administration policy changes will likely range from neutral to negative for the Tesla auto and energy business, the firm said.
If regulations regarding autonomous vehicles are eased before Tesla has achieved full technical progress, it could benefit Google-backed (GOOGL) Waymo, Tesla's key competitor in autonomous vehicles.
The company's stock has benefited from a "catch-up" trade, according to Barclays. Earlier in 2024, Tesla lagged the broader market and other AI-related stocks like Nvidia (NVDA) and Palantir (PLTR) .
However, Tesla's size, liquidity and volatility have made it an appealing candidate for investors seeking exposure to the megacap tech rally, Barclays said. Even after its recent surge, Tesla's gains still significantly trail those for some of its megacap tech peers.
Barclays emphasized the growth of the "Elon premium" in Tesla’s valuation. Musk’s prominent role in supporting the 2024 Trump campaign has elevated his standing as a global figure, translating to heightened interest in Tesla.
“Tesla is the only Elon Musk company that is publicly traded and it has often served as a proxy for an investment in Musk himself. ... [This] value has understandably increased, but this further exacerbates the already-high key-man risk in Tesla stock,” the investment firm said.
Barclays reiterated an equal weight (effectively neutral) rating on Tesla with a $270 price target.
Separately, Baird analysts called the landscape for both electric vehicles and renewables more challenging in the near future due to uncertainty regarding the Inflation Reduction Act and growth in 2025.
Among other things, the $750 billion law, signed into law by President Joe Biden in 2022, seeks to boost U.S. clean energy with new tax incentives, including tax credits for consumers who buy new electric vehicles.
The National Law Review noted last month that Trump and some Republicans in Congress have threatened to repeal all or part of the act because they don’t agree with the policy, and they need the revenue savings to offset their plan to extend the first Trump administration's 2017 Tax Cuts and Jobs Act.
"President-elect Trump has pledged a return to American energy dominance backed by a foundation and focus on leveraging domestic traditional energy resources," the publication said.
“Take away the subsidies [and] it will only help Tesla,” Musk posted in July on X.
Baird said that it remains a buyer of Tesla particularly on pullbacks. The firm has an outperform rating and $280 price target on the shares.
Tesla shares closed regular trading Wednesday off 8.3% at $440.13.
