With political uncertainty mounting ahead of the U.S. presidential election in November, investors are often wondering how a potential victory for Donald Trump would affect certain stocks, including Tesla (NASDAQ:TSLA).

According to Wedbush analysts, a Trump presidency “would be negative overall for the electric car industry, as rebates and tax incentives for electric cars would likely be eliminated. However, we see this as a potential advantage for Tesla.”

Tesla’s unmatched scale and reach in the electric vehicle space could give the company a clear competitive advantage in an environment where electric vehicles are not subsidized, analysts said. That advantage would be further enhanced by likely higher tariffs on China, which would deter cheaper Chinese electric vehicle makers such as BYD (SZ:002594) and Nio (NYSE:NIO) from entering the U.S. market.

More broadly, the key to Tesla’s share price is the market’s realization that Tesla is the most undervalued AI company, the investment firm said. Wedbush analysts are particularly excited about the upcoming Robotaxi Day on August 8, which they say could pave the way to fully autonomous driving (FSD) and an autonomous future.

Analysts stressed that “the worst is not over for Tesla as we expect demand for electric vehicles to return to the disruptive technology giant.”

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