Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management and a prominent Tesla investor, has expressed his outrage over the company’s reported support for eliminating the $7,500 federal electric vehicle tax credit. Gerber took to social media platform X to voice his discontent, calling the position “insanity”.
What Happened
Reports have surfaced that Tesla is backing the Trump administration’s plans to end the incentive, despite having previously lobbied for the tax credit, which has boosted the company’s U.S. sales in recent years. This move appears to contradict Tesla’s stated mission of accelerating the world’s transition to sustainable transport.
Shift in Tesla’s Stance
The shift in Tesla’s stance comes as CEO Elon Musk, who has endorsed Trump, reportedly believes eliminating the credit would harm competitors more than Tesla. This marks a departure from Musk’s previous positions, including his resignation from Trump’s business council in 2017 over the U.S. withdrawal from the Paris climate agreement.
Investor Reaction
Gerber’s outrage was expressed in a tweet, where he stated:
Insanity. $tsla #tesla
Expert Analysis
Investment experts are divided on the potential impact of the tax credit repeal. Gary Black, managing partner at The Future Fund LLC, warns that Tesla has the most to lose, noting that removing the credit would effectively raise Tesla’s U.S. vehicle prices by 20% and affect roughly 30% of its global sales. On the other hand, Wedbush analyst Dan Ives suggests the move could ultimately benefit Tesla due to its superior scale compared to competitors.
Impact on EV Adoption
The potential elimination of the tax credit would require congressional approval and could significantly impact EV adoption in the United States, which already lags behind other major markets. Tesla aims for record sales in the fourth quarter of 2024 to avoid its first annual decline in deliveries.
Price Action
Tesla stock closed at $311.18 on Thursday, down 5.77% for the day. In after-hours trading, Tesla slipped a further 1.15%. Despite recent drops, Tesla’s stock has gained 25.26% year to date.