Elon Musk May Have Endorsed Trump, But Tesla Would Have Done 'Even Worse' Without Biden's $7.5K EV Tax Credit, Says Fund Manager

Tesla, Inc. TSLA weak performance seen since 2022 is its own doing and has nothing to do with President Joe Biden’s policies, said a fund manager on Monday.

What Happened: “The reason $TSLA hasn't done well under the Biden Presidency has nothing to do with Biden,” said The Future Fund LLC Managing Partner Gary Black. The fund manager attributed the weakness to Tesla’s successive price cuts that proved inelastic and did not lift volume, he said.

On the other hand, Tesla benefited from the $7,500 federal electric vehicle tax credit, he pointed out. “Absent Biden's $7,500 EV credit, TSLA would have done even worse,” he said.

Black also waded into the election debate. “Those expecting a [Donald] Trump/[J.D.]Vance landslide in 2024 were getting ahead of themselves since it was pretty clear after the debate that Biden would drop out of the race,” he said. If Vice President Kamala Harris, who has been endorsed by Biden after he stood down, is way behind Trump in opinion polls, the Democrats are unlikely to put her at the top of the ticket, he added.

“Right now it's a dead heat, but I predict that will change in Trump's favor in the coming weeks,” Black said.

See Also: Best EV Stocks

Why It’s Important: Even as Tesla CEO Elon Musk has officially endorsed the Republican presidential nominee, Trump, analysts are divided about the implications of a Trump presidency for the EV maker. Tesla bull Daniel Ives said a second term for Trump would be an overall negative for the EV industry, given the likelihood of the EV rebates/tax incentives getting pulled. But it is a potential positive for Tesla, given the company “has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment,” he said.

Stanphyl Capital Managing Member Mark Spiegel sees the removal of the $7,500 subsidy impacting Tesla’s already battered margins. He also sees Trump doing away with the EV mandates, which will likely take away much of Tesla’s high-margin regulatory credits.

Trump said at the Republican National Convention held last week that he will end federal support for EVs on day one, which he thinks is essential to keep the auto industry from being obliterated. However, at a campaign rally in Michigan on Saturday, Trump toned down his rhetoric against EVs and clarified that he is against only 100% electrification.

Tesla ended Friday’s session down 4.02% at $239.20, according to Benzinga Pro data.

Check out more of Benzinga’s Future Of Mobility coverage by following this link.

Read Next:

• Tesla, Alphabet, GM, Ford Lead Earnings Parade This Week As Market Struggles To Sustain The Summer Rally

Image Via Shutterstock