Dan Ives, an analyst at csi all share investment banking & bush, predicts that although the broader electric auto industry may face potential obstacles, Tesla's ai plan may make significant progress during President Trump's term.

Ives expects that a return of Trump to the White House could greatly boost Tesla's ai ambitions, potentially unlocking a $1 trillion incremental AI valuation for the electric auto manufacturer in the coming years.

However, the outlook for the broader electric auto industry seems mixed. Tesla's CEO Elon Musk, who actively supported Trump's campaign, mentioned during Tesla's second-quarter earnings call that the incoming government may eliminate electric auto subsidies and tax credits.

Ives stated in an interview on Wednesday, "We believe Trump entering the White House will change the landscape for Elon Musk and Tesla." The analyst characterized the alliance between Musk and Trump as a "significant strategic gamble" that may be "very bullish for Tesla's AI/autonomous driving narrative."

csi all share investment banking & bush expects that Tesla's stock price could increase by $40 to $50 during Trump's presidency, which would mean a 16% to 20% rise based on current trading levels. Analysts attribute this optimistic outlook to Tesla's established market position and manufacturing capabilities.

In a report on Tuesday, analysts at csi all share investment banking & bush wrote, "We believe a Trump presidency will be overall detrimental to the electric auto industry as electric vehicle tax credits/incentives may be scrapped. However, for Tesla, we see this as a potential positive, but with some cautions."

In addition to Tesla, AI global strategy's major initiatives are expected to benefit other leading technology companies such as Microsoft, Amazon, Alphabet's Google, and Palantir.

Tesla stocks performed well on Wednesday, rising 14.75% to $288.53. The cumulative increase so far this year has reached 16.15%.