Former President Donald Trump recently announced his intention to bring Elon Musk, the CEO of Tesla and SpaceX, into a potential second-term administration. In an interview with Reuters, Trump stated he would offer Musk a Cabinet position or an advisory role.
Musk’s prominence in the business and tech worlds makes this proposal noteworthy. His innovative approaches and leadership at Tesla have set significant precedents in the electric vehicle industry.
Additionally, this move aligns with Trump’s strategy to integrate top business figures into his administration. Musk’s experience in multiple industries offers potential advantages for a Trump-led government focused on economic growth and technological advancement.
Potential End to EV Tax Credit
Trump indicated he might eliminate the federal tax credits for new electric vehicles. This $7,500 tax credit has been vital for promoting electric vehicle sales across the U.S. Removing it could significantly reshape the EV market, particularly for companies like Tesla.
Trump wants to hire Elon Musk — and possibly cut Tesla's key tax credit https://t.co/Z5lXSD4wpX
— Axios (@axios) August 19, 2024
Trump has long been a critic of tax credits and incentives, often arguing they are not beneficial. “Tax credits and tax incentives are not generally a very good thing,” Trump said during the interview.
Elon Musk has expressed minimal concern regarding the potential removal of the tax credit. “I guess that there would be some impact, but I think it would be devastating for our competitors and for Tesla slightly,” Musk noted. However, he optimistically added, “But long term, [it] probably actually helps Tesla.”
Elon Musk’s pro-Trump super PAC is hiring canvassers in North Carolina, a sign that the former president’s allies are concerned about his slipping support in one of the most Republican-friendly battleground states https://t.co/RPqEP6thdF
— Bloomberg Politics (@bpolitics) August 19, 2024
Implications for the EV Market
Removing the EV tax credit may shift the market dynamics significantly. While Tesla could navigate these changes with minor impacts, competitors might face greater challenges. This strategy may play into Trump’s broader intentions to bolster traditional energy sectors.
Trump has offered to relax pro-EV regulations in exchange for support from the oil lobby. Additionally, his running mate, Ohio Senator J.D. Vance, has been a vocal critic of electric vehicles, calling them a “scam” and proposing to replace the EV tax credit with incentives for gas-powered vehicles.
“We need to see where things play out politically,” Musk remarked, signifying his readiness to adapt to potential policy changes.
