Hillary Clinton was recently announced as the official nominee for President of the USA (representing the Democratic Party), and her victory has the potential to boost Tesla Motors Inc (NASDAQ:TSLA).
Tesla Motors Inc (TSLA) Would Benefit from Higher Oil Prices
Tesla Motors Inc (NASDAQ:TSLA) designs, manufactures and develops electric vehicles. EVs and conventional (petrol or diesel) cars are substitutes for one another. As higher crude oil prices results in higher running costs for fuel powered cars, there is more incentive for consumers to purchase an electric car when the cost of oil is high. However, it should be noted that electric automobiles are not the only alternative, and there are many different brands to choose from.
Despite the above, it is still likely that an increase in the cost of crude oil would result in more demand for Tesla vehicles. This is likely to result in more profit for the car maker, and thus, a higher share price.
Hillary Clinton Wants to Remove President Assad from Office
According to an article published on The Telegraph (on the 29/07/2016), Hillary Clinton would revise America’s strategy and policy on the Syrian conflict. She would focus on removing President Bashar Al-Assad from power by using force.
The article gives more info on how she may achieve this goal. It reads “The Clinton campaign strategy as listed on its website revives a long proposed, but never implemented, plan to create “safe zones” on the ground for civilians. This would require a de facto no fly zone to prevent air strikes in the area. It is a strategy that has been passionately opposed by Damascus, which sees this is a safe haven for rebel opposition groups.”
Greater Middle East Instability Leads to Surging Oil Prices, Potentially Aiding Tesla Motors Inc
Despite the bitter conflict, the Syrian government is still largely able to function, providing public services, and employing many Syrians. Furthermore, areas under the government’s control are generally peaceful and stable. Removing Assad from power would further widen the “vacuum of power” in the Middle East, further giving rise to terrorist groups such as ISIS.
The current situation in Syria is grim, but weakening the Syrian government could make the status quo seem like a picnic. Instability in the Middle East has historically translated into higher oil prices, increasing the incentive to own a Tesla EV.
As the market closed on the 29/07/2016, a share in Tesla Motors Inc (NASDAQ:TSLA) was valued at $234.79, having gained by 1.81% on the day. Tesla currently has a market capitalization of $34.57 billion, a long way off Elon Musk’s aim of $700 billion by 2025.