Prominent Wall Street short seller Jim Chanos has criticized Tesla Inc. for receiving billions in federal subsidies. This criticism comes as Tesla’s Cybertruck is now eligible for a $7,500 federal tax incentive, with a starting price of $72,490.
Background
Chanos’ comments were made after the Cybertruck’s eligibility for the tax incentive was confirmed. He expressed his concerns on social media, stating that while people are outraged by foreign grants, they should not forget the tens of billions of US taxpayer dollars that Musk’s companies and customers receive annually.
What Happened
- Tesla’s Cybertruck is now eligible for a $7,500 federal tax incentive, with a starting price of $72,490.
- Jim Chanos criticized Tesla for receiving billions in federal subsidies, calling attention to the tens of billions of US taxpayer dollars that Musk’s companies and customers receive annually.
Criticism and Controversy
The criticism follows Elon Musk’s recent announcement that President Donald Trump agreed to shut down the U.S. Agency for International Development (USAID), an agency responsible for billions in humanitarian aid and development funding. This move has sparked controversy, with many questioning the motivations behind it.
Why It Matters
- Tesla’s political entanglements come as the company faces challenges in its largest EV market, with California registrations dropping 12% in 2024.
- The company’s market share of zero-emission vehicles in California fell from 60.1% to 52.5% year-over-year.
- Musk’s increased political involvement, including a reported $288 million investment in supporting Trump’s presidential campaign, has coincided with a sales decline.
- Tesla’s brand value decreased by $15 billion in 2024, dropping from 18th to 36th place in global brand rankings.
Price Action
- Tesla’s stock closed at $383.68 on Monday, down 5.17% for the day.
- In after-hours trading, the stock rebounded 1.39% to $389.01.
Conclusion
The controversy surrounding Tesla’s subsidies and Elon Musk’s political involvement continues to grow. As the company faces challenges in its largest EV market, it remains to be seen how these factors will impact its future success.