Tesla shares jumped more than 7% premarket on Monday, extending a red-hot rally fueled by investor bets that the automaker would benefit from CEO Elon Musk's backing of U.S. President-elect Donald Trump.

At $344.50, Tesla is expected to add over $74 billion to its value if premarket gains hold. The stock has jumped nearly 28% since Trump's election victory was declared on Wednesday, surpassing $1 trillion in market value for the first time in two years.

Tesla shares were just over 1% higher for the year before Trump secured his second term at the White House.

Musk has been backing Trump for months in the hopes that his close ties to the now President-elect would position his companies to benefit under the new administration, analysts have said.

The billionaire contributed at least $119 million to a pro-Trump spending group, federal records show.

Tesla's self-driving technology has been under heavy scrutiny from safety regulators as Musk attempts to shift the company's focus towards autonomous driving technology and robotaxis.

In September, Trump said he would establish a government efficiency commission headed by Musk to cut federal spending.

Musk's potential influence in the government could be significant for his other ventures, such as the Starlink broadband system, owing to his role as a major contractor with the U.S. Department of Defense.

On the other hand, Tesla has been a beneficiary of a number of policies Trump has opposed, such as solar and electric-vehicle credits included in the Inflation Reduction Act passed by the Biden Administration.

(Reporting by Zaheer Kachwala in Bengaluru; Editing by Devika Syamnath)