The electric vehicle sector has become a major talking point of the 2024 presidential election.
That’s partially thanks to Tesla Inc TSLA CEO Elon Musk‘s endorsing Republican Donald Trump, even though the former president said, on Christmas Day, that EV supporters should "rot in hell."
The Democratic Party ticket could highlight their contrasting opinion on electric cars now that Vice President Kamala Harris selected Minnesota Gov. Tim Walz to be her running mate.
What Happened: A 2024 presidential election win for Trump could benefit Tesla, considering the GOP nominee has a friendly relationship with Musk.
And Trump has openly offered to change policy to benefit CEOs in exchange for campaign contributions. For Musk, the potential elimination of tax credits for EVs could stifle its competition.
A Trump victory could also hurt the overall electric vehicle sector outside of Tesla, Tesla analysts say. That’s something investors need to know ahead of the 2024 election, especially since Trump — at least before Musk’s endorsement — often denigrated electric vehicles.
Walz, like Harris, has been positive on electric vehicles. A win for the Democratic Party in November would likely continue tax credits and ramp up electrification.
Under Walz, Minnesota became the first in the Midwest and one of 17 states to back the emission standards set by California, as reported by InsideEVs.
"Minnesotans certainly know that old adage, ‘you need to skate where the puck is going to be,'" Walz told reporters back in 2021. "The puck is going to be in EVs. And that is irrefutable."
While serving as the Minnesota governor, Walz has advocated for both EV and hybrid vehicle adoption. His policies faced challenges from automotive dealers in the state, who attempted to sue the Minnesota Pollution Control Agency for alleged overreach.
Minnesota is currently advocating for electric vehicles to represent 20% of new car sales by 2030.
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Why It's Important: The auto industry could face a huge setback if Trump is elected as he could undue years of investment on the transition to electric vehicles, InsideEVs reports.
Companies like Ford Motor Company F and General Motors Corporation GM have spent years investing billions of dollars on the transition to EVs and building new factories and models that can appeal to customers.
Musk's support of Trump could also have a negative impact on Tesla stock with a win by the former president in the election potentially setting the whole sector back.
It was recently reported that European pharmacy chain Rossman decided to stop buying Tesla vehicles due to the Trump endorsement by Musk.
"Trump has repeatedly described climate change as a hoax — this attitude is in stark contrast to Tesla's mission to contribute to environmental protection through the production of electric cards," Rossman spokesperson Raoul Rossman said.
Rossman represents a small customer of Tesla totaling around 38 annual vehicles, but the decision by management could show that Musk's endorsement could hurt the company if more customers pull their sales and partnerships.
With the 2024 election expected to be close, investors are likely torn on whether they should be investing aggressively in electric vehicle stocks before the results are decided.
Two potential winners from a Harris/Walz win could be the KraneShares Electric Vehicle and Future Mobility Index ETF KARS and the Global X Autonomous & Electric Vehicles ETF DRIV.
The ETFs hold a basket of stocks in the electric vehicle sector and could benefit from Harris continuing the policies already put in place during Joe Biden's time in office.
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