Prominent Tesla Inc TSLA investor Ross Gerber blasted Tesla’s reported support for eliminating the $7,500 federal electric vehicle tax credit, calling the position “insanity” on social media platform X.
What Happened: The CEO of Gerber Kawasaki Wealth and Investment Management was responding to reports that Tesla is backing the President-elect Donald Trump administration’s plans to end the incentive.
The move appears to contradict Tesla’s stated mission of accelerating the world’s transition to sustainable transport. According to a recent Reuters report, Tesla has indicated support for removing the tax credit despite having previously lobbied for the incentive, which has boosted the company’s U.S. sales in recent years.
The shift in Tesla’s stance comes as CEO Elon Musk, who has endorsed Trump, reportedly believes eliminating the credit would harm competitors more than Tesla. This marks a departure from Musk’s previous positions, including his resignation from Trump’s business council in 2017 over the U.S. withdrawal from the Paris climate agreement.
See Also: Cathie Wood Keeps Betting On Amazon’s ‘Haul’ Play: Ark Loads Up $6M Worth Of Shares
Why It Matters: Investment experts are divided on the potential impact. Gary Black, managing partner at The Future Fund LLC, warns that Tesla has the most to lose, noting that removing the credit would effectively raise Tesla’s U.S. vehicle prices by 20% and affect roughly 30% of its global sales.
However, Wedbush analyst Dan Ives suggests the move could ultimately benefit Tesla due to its superior scale compared to competitors.
The debate intensifies as Tesla aims for record sales in the fourth quarter of 2024 to avoid its first annual decline in deliveries. The potential elimination of the tax credit would require congressional approval and could significantly impact EV adoption in the United States, which already lags behind other major markets.
Price Action: Tesla stock closed at $311.18 on Thursday, down 5.77% for the day. In after-hours trading, Tesla slipped a further 1.15%. Despite recent drops, Tesla's stock has gained 25.26% year to date, according to data from Benzinga Pro.
Read Next:
Courtesy of Tesla, Inc.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
