Trump's Proposed Corporate Tax Cuts Could Boost Tesla's FY25 EPS by 4%, Says Analyst

The Future Fund Managing Partner Gary Black said on Monday that a potential reduction in the corporate tax rate would help boost EV maker Tesla Inc.’s TSLA earnings per share by $0.12 for FY25.

What Happened: Tesla’s statutory tax rate is currently 21%, Black noted. This is the rate at which the company’s income from America is taxed.

Given that half of Tesla’s pre-tax profit comes from the U.S., a drop in this tax rate from 21% to 15% could add $0.12 to Tesla’s EPS in this fiscal year, marking an increase of about 4%, Black said.

Black’s comment comes on the heels of Trump pledging that his administration will cut the corporate tax rate to 15% for companies building their products in America.

Given that TSLA's statutory tax rate today on income from America is 21%, and U.S. profits make up roughly 50% of TSLA pretax profits, a change in the U.S. statutory tax rate from 21% to 15% could be worth $.12/share (+4%) in incremental $TSLA FY'25 EPS. https://t.co/DG0xyfgKRi
— Gary Black (@garyblack00) January 27, 2025

Why It Matters: Tesla reported a non-GAAP EPS of $3.12 in 2023, marking a drop of nearly 23% as compared to the year ago. Tesla is slated to report its 2024 results on Wednesday.

Tesla reported its first annual decline in vehicle deliveries in over a decade in 2024. The company reported global deliveries of 1.79 million vehicles in 2024, down from full-year deliveries of 1.81 million in 2023.

However, the potential fall in automotive revenue could likely be balanced by a rise in earnings from the company’s other segments such as the energy segment or its services segment.

Tesla CEO Elon Musk and President Trump forged a strong relationship after Musk put money into the latter’s election campaign. Trump has also tapped Musk to lead the Department of Government Efficiency aimed at dismantling bureaucracy and restructuring agencies.

Some analysts and investors expect this newfound relationship to allow for favorable regulations toward Tesla and other Musk-owned companies during Trump’s term.

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