Tesla is set to report its quarterly and annual results Wednesday, and the numbers aren’t looking great. The electric vehicle giant is expected to reveal thinner profit margins and its first-ever annual sales decline. But here’s the twist: investors don’t seem too worried. Instead, they’re buzzing about CEO Elon Musk’s close relationship with former President Donald Trump and what it could mean for Tesla’s future.

Shockingly, Tesla’s stock has surged 57% since Election Day, despite the company’s challenges. These include tougher emission regulations, which could slash the billions Tesla earns from selling regulatory credits, and fierce competition in the EV market. In fact, Tesla nearly lost its crown as the world’s biggest EV maker to Chinese automaker BYD last year—a title it’s likely to lose for good in 2024 if sales keep dropping.

But Musk’s bromance with Trump has investors dreaming big. They’re hopeful the new administration will greenlight Musk’s ambitious projects, like fully self-driving cars without pedals or steering wheels. While Tesla’s “Full Self Driving” tech hasn’t lived up to Musk’s hype so far—and has even faced safety investigations—Musk insists his “Cybercab” robotaxis will hit the road by 2026.

“The Trump tailwind is just starting for Musk and Tesla,” says Dan Ives, an analyst at Wedbush Securities. He believes Tesla’s autonomous driving tech will unlock massive value, calling it the “most undervalued AI play in the market.”

Still, not everyone’s convinced. Critics argue Tesla is facing a demand problem, especially as growth in the U.S. EV market slows. Gordon Johnson, a vocal Tesla skeptic, claims Musk’s political stances—like his support for Trump and far-right parties—are turning off liberal buyers in the U.S. and Europe.

Meanwhile, Trump’s vow to roll back emission standards could hurt Tesla’s regulatory credit sales, which brought in $2 billion in the first nine months of 2024. And if the $7,500 EV tax credit disappears, Tesla might have to slash prices even further, squeezing its profits.

With Musk spending more time in Mar-a-Lago and Washington, D.C., than at Tesla’s factories, some wonder how focused he really is on the company. Even as Tesla unveils updates like the refreshed Model Y, Musk’s absence from the usual hype events has raised eyebrows.

Despite the challenges, Tesla remains a magnet for investor optimism. But with sales slipping and competition heating up, the road ahead looks bumpy—even for a company as ambitious as Tesla.