On paper, the election of Donald Trump is a very bad blow for the electric car. The Republican has in fact warned that he will eliminate a tax credit of 7,500 dollars and all tax measures favorable to these green vehicles. A prospect that is enough to give all car manufacturers a cold sweat. Tesla and Elon Musk, however, remain surprisingly optimistic. Explanations.
Panic on the stock market
This Thursday, November 14, following the release of this information, a wave of panic arose among investors. The stock prices of Rivian, Lucid, and even Tesla have all fallen sharply.
In fact, most American manufacturers remain dependent on this state-funded aid. If these measures are really put in place, it is therefore a safe bet that their sales will be heavily affected. But in this defeatist climate, the attitude of Tesla and its leaders is surprising.
Indeed, Elon Musk enormously supported the candidacy of Donald Trump, so much so that many observers wondered why the president-elect made such an unfavorable decision for his new friend.
Assistants to the Tesla boss have indicated that these decisions will be especially devastating for the competition, while the effect will be minimal for the manufacturer. Elon Musk himself made the same speech last July. He anticipated thus: “I think it would be devastating to our rivals and slightly to Tesla. But in the long run, I think it will probably help Tesla”.
Will Tesla really be spared?
Clearly, Tesla has taken a lead in its market and the company is even able to wage a price war that hurts newcomers. So much so that the latter only have a fairly tight margin which will be directly impacted by the reduction in purchasing aid.
This is also the opinion of Dan Ives, analyst at Wedbush. Quoted by Business Insiderthe latter predicts:
Although the loss of the tax credit for electric vehicles could also hurt demand on margins in the United States, it will allow Tesla to better fend off competition from Detroit (where the incumbent manufacturers are located, Editor’s note), because the pricing, scale and scope pale in comparison to the rest of the auto industry once the EV tax credit disappears.
Not everyone is of this opinion. The Verge believes, for example, that the tax measures that Donald Trump could take as well as the increase in customs tariffs could cause major economic and political disorder which would have a lasting impact on the automobile industry as a whole. Tesla would therefore not escape this.
