Trump Weighs Ending EV Tax Credit, Considers Elon Musk as Adviser

Donald Trump, the Republican presidential candidate, recently revealed his intention to potentially end the $7,500 tax credit for electric vehicle (EV) purchases if elected. Speaking in York, Pennsylvania, Trump expressed his skepticism about the efficiency of such tax incentives, stating, “Tax credits and tax incentives are not generally a very good thing.” This stance could significantly impact Tesla Inc (TSLA:US), a leading EV manufacturer, which benefits from the credit.

In the same interview, Trump praised Tesla and SpaceX CEO Elon Musk, describing him as "a brilliant guy" and expressing openness to appointing Musk to a cabinet position or advisory role in his administration. Musk, known for his innovation in the tech and automotive industries, has previously shown interest in governmental efficiency and hinted at his willingness to contribute.

As Tesla continues to break records, producing approximately 411,000 vehicles and delivering around 444,000 in the second quarter of 2024, its role in the EV market remains significant. The company also achieved a record deployment of 9.4 GWh of energy storage. Tesla is set to announce its Q2 financial results on July 23, 2024, which will provide further insight into its performance and future outlook.

Trump’s potential policy shift aligns with his broader views on the automotive industry. He proposed new tariffs on Mexican-made vehicles and suggested that Chinese automakers should build plants in the U.S. to stimulate domestic job creation. This reflects Trump’s ongoing focus on bolstering American manufacturing and reducing reliance on foreign production.

Trump’s considerations regarding the EV tax credit and his admiration for Musk come amid a larger debate over the future of the U.S. automotive industry. His decisions could shape the direction of EV adoption and manufacturing in the country. While Trump supports the development of electric and hybrid vehicles, he also emphasized the importance of gasoline-powered cars, highlighting a more diverse approach to the automotive sector.

On a congressional-related note, Representative Josh Gottheimer sold shares of Tesla amounting between $1,000 and $15,000 in July 2024, potentially reflecting his stance on the company's future amid the evolving political landscape.

As the 2024 presidential race heats up, Trump’s policies on the automotive industry and his potential collaboration with Musk will likely be key topics of discussion.