• Tesla shares surged more than 8% on Friday, pushing the company's market cap past $1 trillion.
• The stock has been on a tear this week as investors bet that Tesla and CEO Elon Musk will benefit from a potential Trump administration.
• Musk was Trump’s most vocal promoter on the campaign trail and contributed more than $130 million to help him win the election.

Shares of Tesla climbed more than 8% in afternoon trading Friday, pushing the electric vehicle maker's market cap past $1 trillion.

The company's stock has rallied about 27% this week after Donald Trump won the U.S. presidential election and investors have grown optimistic that the former leader's return to the White House could benefit Tesla. Elon Musk, Tesla's CEO, has been a key ally for Trump throughout his campaign, pouring at least $130 million into a pro-Trump campaign effort.

Tesla had a market cap of $807.1 billion through Tuesday's close. Before this week's rally, shares of the carmaker were up about 1% for the year. Tesla's stock is now up about 27% year to date.

Tesla rejoins a growing club of tech names that are now worth more than $1 trillion, including Nvidia, Apple, Microsoft, Alphabet, Amazon and Meta (though all but Meta are worth more than $2 trillion). Tesla's market cap first crossed the $1 trillion mark in October 2021.

Wedbush Securities analyst Dan Ives has said that a potential Trump administration could spell less regulation for Tesla and other companies.

"Tesla has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players (BYD, Nio, etc.) from flooding the U.S. market over the coming years," Ives wrote in a note to clients this week.

Trump has said previously he may cut the federal $7,500 electric vehicle tax credit. Those credits have helped to drive sales of Tesla vehicles historically.

In its most recent earnings update, Tesla reported revenue of $25.18 billion and net income of $2.17 billion in the third quarter.

CEO Musk said on the earnings call that his "best guess" was that "vehicle growth" would reach 20% to 30% next year, due to "lower cost vehicles" and the "advent of autonomy."

Tesla has been promising, and developing, driverless vehicle technology for more than a decade. Its key U.S. competitor, Alphabet-owned Waymo, has pulled ahead and is already operating commercial robotaxi services in several major cities.

On the third-quarter call, Musk said he would use his sway with a Trump-Vance administration to establish a "federal approval process for autonomous vehicles." Currently, approvals happen at the state level, which the CEO sees as a regulatory hurdle Tesla will need to overcome once it finally offers more than partially automated driving systems.

— CNBC's Lora Kolodny contributed to this report.

Correction: This story has been updated to correct the year Tesla's market cap crossed $1 trillion for the first time. Tesla's net income was $2.17 billion in the third quarter. An earlier version misstated the figure.