EV Tax Credit: Tesla, owned by Elon Musk, has endorsed Donald Trump’s proposal to remove the EV tax incentives introduced by the Biden administration, according to a Reuters report.
The Biden administration implemented a $7,500 tax credit to promote EV adoption. Although Trump plans to eliminate this benefit, Musk’s support for the change is notable, given Tesla’s leading position in the EV market and Musk’s role on Trump’s transition team.
Earlier this year, Musk explained why he supports removing the subsidy. While acknowledging it would impact Tesla, he noted that it would hurt competitors in the EV sector even more, giving Tesla a long-term advantage by reducing competition. Tesla’s primary rivals in the U.S. EV market include legacy automakers like General Motors and Ford, as well as emerging players like BYD.
The EV tax credit was part of Biden’s broader climate initiative, included in the 2022 Inflation Reduction Act, aimed at addressing climate change through policies like the Green New Deal. Trump has publicly opposed this initiative, pledging to dismantle what he calls the “Green New Scam” upon taking office.
Musk expressed support for ending the EV subsidy during Tesla’s earnings call in July 2024, stating that it would likely benefit Tesla in the “long term.”
Musk’s association with President-elect Trump has been prominent, both during and after the campaign. Since Trump’s election, Musk has joined Trump’s transition team, where he oversees the newly created Department of Government Efficiency alongside entrepreneur Vivek Ramaswamy. The department’s focus includes reducing government spending, though specific details remain unclear.
The U.S. EV market is projected to reach $94.9 billion in revenue in 2024, with a 10.49% annual growth rate expected through 2029. Tesla continues to lead the market, although its share recently dropped below 50%, now at 48.9%, with competitors like General Motors and Honda also vying for market share.
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