Billionaire Elon Musk is advocating to preserve federal tax incentives for electric vehicles (EVs), which are at risk of being eliminated by President Donald Trump’s new bill. These incentives are crucial for making EVs more affordable and would have remained until 2032.
Tesla, Musk’s automaker, reported a 32% decline in deliveries quarter-over-quarter and a 13% decrease year-over-year, raising concerns about its sales growth. If the proposed elimination of EV tax credits, which range from $4,000 to $7,500, goes into effect, it could severely impact Tesla’s demand and pricing strategy. However, Tesla holds $16 billion in cash and a $1 trillion market cap, providing a buffer against potential setbacks.
While the immediate implications of losing tax credits could negatively affect Tesla, it might also reduce competition from smaller, unprofitable EV manufacturers, potentially allowing Tesla to capture a larger market share in the long run.
