A recent executive order signed by President Donald Trump has put an emphasis on ending electric vehicle plans put in place by former President Joe Biden. The order could put an end to the $7,500 tax credits that have helped boost the electric vehicle sector.
What’s Happening
The “Unleashing American Energy” executive order aims to eliminate the “electric vehicle mandate” and terminate the Green New Deal. While the order may require additional approval to end the $7,500 tax credit, it pauses the disbursement of funds that were part of the Inflation Reduction Act of 2022.
Impact on Tesla
The electric vehicle tax credits have helped boost sales of EVs, including those from Tesla. However, Tesla CEO Elon Musk has changed his stance on the credits in recent years. Musk has stated that he is okay with the tax credits going away and has pledged his support to Trump.
Tesla’s Advantage
Musk believes that the end of the tax credits could be “devastating” for Tesla’s rivals, but would likely be a long-term positive for his company. A poll conducted by Tesla influencer Sawyer Merritt found that:
- 40.4% of voters believe the EV tax credit going away would be bullish for Tesla
- 27.5% believe it would be neutral
- 19.4% believe it would be bearish
- 12.6% are unsure
Why It Matters
Musk’s stance on tax credits may come as a surprise, given his past support for the sector. However, Tesla’s focus on autonomous vehicles could be the next political move by the Trump administration. Trump has previously stated that he would ban autonomous vehicles, but may have reversed his stance to support Tesla’s vision.
Conclusion
The new EV tax credit rules could be bad for the electric vehicle sector, but may be beneficial for Musk and Tesla. The question remains what the short and long-term impacts on Tesla will be. As of now, investors don’t seem too concerned about the potential loss of EV tax credits, with Tesla’s stock up 103% over the last year.
Current Stock Price
Tesla stock closed down 0.57% to $424.07 on Tuesday, with a 52-week trading range of $138.80 to $488.54.