On November 14, 2024, sources informed Reuters that US President-elect Donald Trump’s transition team plans to cancel the $7,500 tax credit available to consumers purchasing electric vehicles. According to the sources, Tesla, as the world’s largest electric vehicle manufacturer, has already told Trump’s team that they support the elimination of the subsidy. Earlier this year, Elon Musk stated that while eliminating the subsidy might have a slight impact on Tesla’s sales, it would have a devastating effect on competitors, including traditional automakers like General Motors.
It is worth noting that this tax incentive is a key component of President Biden’s Inflation Reduction Act (IRA), aimed at encouraging consumers to buy electric vehicles and promoting the development of clean energy. The Trump administration hopes to save funds by eliminating the electric vehicle tax credit, which could be used to cover the cost of the soon-to-expire trillions of dollars in tax cuts.
The Trump administration’s plan immediately sparked a strong market reaction. Stocks of electric vehicle companies generally fell, with Tesla closing down 5.77%, and other manufacturers like Nikola and Rivian seeing declines of more than 10%. This indicates concerns in the market about the potential slowdown in the adoption of electric vehicles and industry development if the subsidies are eliminated.
Trump had pledged before the election that, even though US oil production has reached historic highs, he would push to increase US oil production further and roll back President Biden’s costly clean energy programs. These policies include not only the tax credit on electric vehicle, but also subsidies for wind and solar energy as well as large-scale support for hydrogen energy production.
Source: WeChat Official Account—鑫椤锂电
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