Former U.S. President Donald Trump hinted at the potential discontinuation of the $7,500 tax credit for electric vehicle purchases if he is re-elected. Trump also expressed openness to appointing Elon Musk, CEO of Tesla Inc. TSLA, to a cabinet or advisory role.
What Happened: Trump, the Republican presidential candidate, made these statements during an interview with Reuters after a campaign event in York, Pennsylvania, on Monday. He suggested that tax credits and incentives are generally not beneficial and that he would consider ending the EV credit.
“Tax credits and tax incentives are not generally a very good thing,” Trump said.
When asked about the possibility of Musk taking on an advisory role or cabinet job, Trump responded affirmatively, praising Musk’s intelligence. Musk had previously endorsed Trump in the U.S. presidential race.
“He’s a very smart guy. I certainly would, if he would do it, I certainly would. He’s a brilliant guy,” Trump said.
If elected, Trump could potentially reverse Treasury Department rules that have facilitated automakers’ use of the $7,500 credit or ask the U.S. Congress to repeal it entirely. During his presidency, Trump had sought to repeal the EV tax credit, a move that was later expanded by President Joe Biden in 2022.
Trump also indicated plans to discourage exports of vehicles made by the Detroit Three automakers and others from Mexico for the U.S. market by imposing new tariffs. He also threatened to prevent Chinese automakers from building new plants in Mexico for U.S. market vehicles.
Why It Matters: The potential elimination of the EV tax credit comes at a time when the relationship between Trump and Musk appears to be strengthening. Recently, Musk expressed interest in inviting Trump to visit Tesla’s Giga Texas, highlighting Trump’s support for American manufacturing.
Moreover, the partnership between Trump and Musk has raised eyebrows, given their past disagreements on climate change and electric vehicles. According to CNBC, their alliance could significantly impact the future of the EV industry.
Additionally, the House Judiciary Committee has recently condemned the European Union for allegedly trying to intimidate Musk’s social media platform, X. The committee’s actions underscore the ongoing tensions surrounding Musk’s ventures and their intersection with political interests.
Price Action: Tesla stock closed at $222.86 on Monday, gaining 3.12% for the day. In after-hours trading, the stock dipped 0.38%. Year to date, Tesla’s stock has declined 10.29%, according to data from Benzinga Pro.
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This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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