Trump's Plan To Revoke $7,500 EV Tax Credit Is A 'Huge' Negative For Tesla, Says Gary Black, Downplays Impact On Rivals

The removal of the $7500 federal tax credit on the purchase of electric vehicles will effectively raise the price of Tesla Inc TSLA vehicles in the U.S. as compared to its peers and pose a huge negative catalyst for the company, The Future Fund Managing Partner Gary Black said on Tuesday.

What Happened: While about nine Tesla vehicle models currently qualify for the tax credit, only 12 vehicles from rival brands qualify.

Black, himself a Tesla bull, slammed bullish opinions of the removal of tax credit harming competitors over Tesla and said, “Mathematically that makes no sense, with TSLA US roughly 30-35% of TSLA global volume, and General Motors, Ford, Stellantis US EVs accounting for 4-5% of their respective global volumes.”

The removal of the tax credit will also not likely move rivals out of the EV segment, Black said. “That is the same argument I heard when TSLA cut EV prices in 2022-2023. In reality, everyone matched the TSLA-led price cuts, no one gave up, and $TSLA stock got hurt the worst in the ensuing price war,” he noted.

2/ I keep hearing the same dumb argument that the loss of upfront EV credits hurts competition more than TSLA. Mathematically that makes no sense, with TSLA US roughly 30-35% of TSLA global volume, and $GM $F $STLA $VOW US EVs accounting for 4-5% of their respective global…
— Gary Black (@garyblack00) January 22, 2025

Why It Matters: In November, Reuters reported that Donald Trump‘s transition team plans to kill the $7,500 tax credit available on EV purchases. On Monday, after his inauguration, Trump himself said his administration would consider ending EV tax credits.

Currently, multiple Tesla vehicles qualify for a $7500 federal tax credit including the single-motor and dual-motor Cybertruck, all three variants of the Model 3 and Model Y, and the all-wheel drive variant of the Model X.

Rival models that qualify for the credit include the Honda Prologue, the Cadillac Optiq, LT Model of the Chevrolet Silverado EV, among others.

Tesla CEO Elon Musk has previously dismissed the impact of a drop in EV tax credit for Tesla saying that the impact of the elimination of subsidies would only be slight for Tesla but devastating for its competitors. The elimination of EV subsidies would probably help Tesla in the long term, he added.

While some other Tesla bulls also hold similar opinions, some including Black are skeptical.

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