The Future Fund Managing Partner, Gary Black, recently stated that a potential reduction in the corporate tax rate could help increase Tesla’s earnings per share by $0.12 for FY25. This would mark an increase of approximately 4%.
Current Tax Rate and Potential Impact
- Tesla’s statutory tax rate is currently 21%, which applies to the company’s income from the United States.
- A drop in this tax rate from 21% to 15% could add $0.12 to Tesla’s EPS in this fiscal year, given that half of Tesla’s pre-tax profit comes from the U.S.
Background on Corporate Tax Cuts
The comment comes after President Trump pledged to cut the corporate tax rate to 15% for companies building their products in America. This move could have significant implications for companies like Tesla, which has a substantial presence in the United States.
Why This Matters
- Tesla reported a non-GAAP EPS of $3.12 in 2023, marking a drop of nearly 23% compared to the previous year.
- The company is set to report its 2024 results, which may show a decline in vehicle deliveries.
- However, a potential fall in automotive revenue could be balanced by a rise in earnings from other segments, such as the energy segment or services segment.
Relationship Between Trump and Tesla
- Tesla CEO Elon Musk and President Trump have a strong relationship, which could lead to favorable regulations for Tesla and other Musk-owned companies.
- Musk has invested in Trump’s election campaign, and Trump has tapped Musk to lead the Department of Government Efficiency.
Future Outlook
Some analysts and investors expect the relationship between Trump and Musk to result in favorable regulations for Tesla, which could boost the company’s earnings and growth. As the company navigates the changing regulatory landscape, it will be essential to monitor its progress and adjust expectations accordingly.
Additional Resources
For more information on the future of mobility and Tesla’s developments, follow the link to our [ Mobility Coverage ](insert link).
Related News
- [ Tesla’s New Model Y Gets Over 70,000 Orders In 5 Days Of Launch In China Despite Costing 5% More Than Its Predecessor: Report ](insert link)