Tesla has been on a tear since Donald Trump won the U.S. presidential election, despite the president-elect’s plans to target key benefits that have supported electric vehicle makers. The stock has soared more than 37% since the election, while legacy automakers such as Ford and General Motors have have seen modest gains of more than 5%. Pure-play electric vehicle stocks like Rivian and Lucid are flat and down more than 3%, respectively, since Trump’s victory. So why is Tesla soaring even as a second Trump administration is expected to fundamentally disrupt the U.S. electric vehicle market? Trump is planning to kill the $7,500 tax credit for people who buy electric vehicles and has vowed to rescind all unspent funds under the Inflation Reduction Act. And increased tariffs could make inputs for electric vehicles more expensive. These headwinds ignore the fact that Trump’s new best friend is Tesla CEO Elon Musk, Bernstein analyst Toni Sacconaghi told clients in a Monday note. Musk spent around $200 million to help elect Trump, and is heading a new government efficiency group with former GOP presidential candidate Vivek Ramaswamy. “As a result, Trump has turned more favorable towards electric cars, and to Elon’s interests more broadly,” Sacconaghi, who rates the stock as underperform, told clients. Legacy automakers Ford and General Motors, on the other hand, are in a difficult position with few positive narratives postelection. Once the EV tax credits are gone, they will face lower sales volume, hurting profitability, or will have to slash prices which will hurt their margins, according to a Friday UBS note. The biggest potential impact for Tesla is the acceleration of testing for self-driving cars, Sacconaghi said. Trump is planning to ease rules for self-driving vehicles, people familiar with the matter told Bloomberg News. Tesla’s stock gained around 8% on Monday in wake of the report. While regulation of self-driving vehicles largest resides with the states, Trump could at least pick someone to lead the National Highway and Traffic Safety Administration who has a more favorable view of the technology and would put an end to investigations of Tesla, Sacconaghi said. Musk’s role within Trump’s inner circle also reinforces the “tough to bet against him thesis” driving option activity and retail buying postelection, Barclay’s analyst Dan Levy told clients in a Monday note. Some will argue that Tesla’s rally creates an even larger disconnect between the stock and the company’s actual fundamentals, Levy wrote. But Tesla’s fundamentals are largely steady postelection, while Musk’s relationship with Trump underlines how Tesla largely controls the self-driving vehicle narrative, the analyst said. “For now, so long as fundamentals are steady and the premium narrative is in place, it may be tough to crack the stock,” Levy told clients. He rates the stock as equal weight. Despite the potential advantages Tesla has under Trump compared to competitors, Bernstein and Barclays still see downside for Tesla. Barclays raised its price target to $270, but that still suggests a nearly 16% pull back from Friday’s close of $320.72. Bernstein’s target is $120, implying downside of 63%.