EV makers slide on report Trump wants to scrap EV tax credit

• EV stocks fell on Thursday after a report said President-elect Trump aimed to cut the EV tax credit.

• The $7,500 tax credit is part of Biden's Inflation Reduction Act, enacted in 2022.

• Tesla CEO Elon Musk, a Trump ally, has said ending the tax credit would hurt US EV companies.

Electric-vehicle stocks dropped on Thursday after a report said President-elect Donald Trump's transition team was looking at doing away with the EV tax credit.

Reuters reported that Trump's transition team had drawn up plans to end the $7,500 consumer tax credit for EV sales as part of broader tax legislation.

Tesla stock dropped by 5%, to $312.20 a share. Shares of Rivian plunged by 12%, to $10.57, and Lucid dropped by 3%, to $2.11 a share.

Ending the tax credit — a key measure of President Joe Biden's 2022 Inflation Reduction Act — would likely hurt EV sales, but sources told Reuters that Tesla representatives supported ending the subsidy.

Tesla CEO Elon Musk has become a strong ally of Trump in recent months, supporting his campaign with sizable donations and spending time with Trump at Mar-a-Lago.

Musk has argued that while ending federal tax incentives for EV purchases would hurt Tesla's sales, the move would be more damaging to Tesla's US EV competitors, including General Motors and Ford.

General Motors stock jumped by about 1% on Thursday, while Ford shares were about flat.

The Reuters report suggested Trump's team viewed the tax credit as an easy target. Other pieces of the Inflation Reduction Act could be hard to roll back, as the money for many programs has already been distributed. Eliminating the tax credit could garner broad support from Republicans and help offset the costs of future tax cuts.

Correction: November 14, 2024 — An earlier version of this story misstated the day the EV makers' shares fell. It was Thursday, not Wednesday.

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