Electric vehicle stocks are falling Thursday after a report detailed the new Trump administration’s plans to eliminate a tax break for consumers who buy cleaner cars.
Newly elected President Donald Trump’s transition team plans to eliminate the $7,500 tax credit for EV purchases as part of a broader tax overhaul, Reuters reports. If the credit is removed, the EV transition will likely be hit hard as prices of numerous models will effectively rise.
Several companies, including Ford Motor Co. and Hyundai Motor Co., have adjusted their plans to ensure their vehicles qualify for the $7,500 tax credits. In just three months, these credits have saved EV buyers $600 million, according to the Treasury Department.
Shares of electric truck and SUV maker Rivian (RIVN) fell more than 12% on Thursday, erasing much of the gains made after Volkswagen (VWAGY) increased its planned investment in their joint venture to 5.8 billion dollars. The share price of Lucid (LCID) continued its decline from earlier in the day, falling 3%.
Even Tesla (TSLA), which has been pushed to a $1 trillion valuation by the election wave, saw its shares fall 5% on Thursday. Analysts view CEO Elon Musk’s close relationship with the newly elected president as a boon for the stock; that relationship includes plans to make Musk co-head of the nongovernmental Department of Government Efficiency.
Tesla Bull and Wedbush Securities analyst Dan Ives said Tuesday evening that it is “clear that Musk will play a huge role in the Trump White House, with his increasing reach evident across many federal agencies,” adding that he will likely be involved in discussions about artificial intelligence. information and tariffs for China.
Read more: Automakers are bracing for Trump – and his anti-EV plans
Tesla representatives told a committee assembled by the team that they support ending the subsidy, Reuters reported, echoing Musk’s comments earlier this year, calling it “devastating” for competitors and a mild blow to Tesla. These meetings are reportedly led by North Dakota Governor Doug Burgum, a candidate for Trump’s “energy czar,” and Harold Hamm, the billionaire founder of fossil fuel giant Continental Resource.
Trump has said he wants to scrap the “Green New Scam,” referring to President Joe Biden’s pro-EV policies, including the Inflation Reduction Act (IRA), where the tax credits come from. On his first day in office, Trump plans to roll back Environmental Protection Agency and Transportation Department regulations and expand oil drilling.
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