Reasons why Elon Musk dey support ending EV tax credits

Di Trump transition team reportedly dey prepare di plans to take eliminate di $7,500 electric vehicle tax credit, key piece of President Biden efforts to accelerate U.S. EV adoption and major tailwind for Tesla (TSLA). Musk don tell Trump say e support dose plans.

Trump plans for EVs and di associated tax credits neva dey publicly detailed.

Still, Musk support for di Trump EV plans don raise plenty questions about why e go endorse seeming headwinds for him own company. Dis na some possible explanations.

Key Takeaways

Elon Musk don reportedly endorse President-elect Donald Trump plans to scrap federal electric vehicle tax credit wey don benefit him EV company, Tesla.

Some experts talk say scrapping subsidies fit benefit Tesla.

If domestic competitors slow dia investment for EVs, Tesla fit dey beta-positioned to take grow di market share.

Musk, wey don make autonomous vehicles Tesla di next big bet, fit also see di Trump administration support as self-driving cars offsetting headwinds for Tesla EV business.

Elon Musk dey wear many hats. E be di CEO of America leading electric vehicle maker and influential advisor to Donald Trump, president-elect wey fit end federal support for electric vehicles.

Tesla Scale an Advantage Over Competitors

Trump second term dey expected to dey difficult for di EV industry overall.

In addition to take scrappe EV tax credits, Trump don vow say, to rescind vehicle emissions standards wey go force car manufacturers to make EVs greater portion of dia total sales throughout di next decade.

Yet some dey see di potential for Tesla to benefit from Trump anti-EV policies.

Musk himself don talk for call with investors for July say eliminating di federal tax credits fit benefit Tesla for di long-term in part bicos “e go dey devastating for our competitors.”

Tesla na one of di only U.S. carmakers wey electric vehicles dey profitable.

Di company fit build electric cars for lower cost than di domestic competitors, wey go enable am to undercut dem for pricing for di market without subsidies.

Still, Tesla sales likely go dey hurt by di elimination of di EV tax credit.

Gene Munster, co-founder of Deepwater Asset Management, don compare di end of di EV tax credit to 15% price hike on Tesla cars wey go cut into sales.

Ending di tax credit fit also discourage competitors like General Motors (GM) and Ford (F) from continuing to invest heavily in EVs, leaving di door open for Tesla to grow its already sizable market share.

Musk All-In on Autonomous Cars

But Musk support for ending EV subsidies fit also stem from him big bet for autonomous driving and robotaxis.

“Di value of Tesla overwhelmingly dey autonomy,”

e talk of questions about EV tax credits for July. “dese oda things na annoyance relative to autonomy,”

Di Trump team dey plans to make di federal framework for autonomous vehicles priority of di incoming Transportation Department, Bloomberg report Monday.

Framework wey accelerate di adoption of self-driving cars go fit benefit Tesla, wey unveil prototypes of two new autonomous vehicles last month.

Musk dey expect Tesla Cybercab and Robovan, neither of which get pedals or steering wheel, to eventually form robotaxi fleet wey go compete directly with di ride-sharing services like Uber (UBER) and Lyft (LYFT).

Since him articulate dat vision, Tesla stock don soar as some investors don reframe Tesla as di autonomous vehicle and AI company rather than conventional car maker.

Before Trump re-election, di path to make Musk robo-taxi dream possible bin dey seen as facing more regulatory roadblocks; Companies like Alphabet (GOOG; GOOGL) Waymo and GM Cruise don face significant scrutiny from safety officials.

Musk influence with Trump, however, fit help clear di path for Tesla.

“Di golden path for Tesla around Cybercabs and di autonomous dey now within di reach wey emboldened Trump/Musk strategic alliance dey play out in real time,” Wedbush analysts write.

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