Despite the post-debate chaos in the Democratic party, President Biden and former President Trump remain the most likely candidates in the upcoming elections, and their policies – and particularly the sharp differences between them – remain in sharp focus.
Though Trump initially appeared as a better candidate for the American electric vehicle (EV) industry with his promises of protectionist tariffs, the situation changed both with the Republican’s pledges to the fossil fuel corporations and with Biden’s push for green energy.
Looking at the respective policies, Wedbush’s Dan Ives concluded that, much as can generally be expected, a second Trump term would likely be highly damaging for the EV sector.
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Why Trump would harm EVs but help Tesla
According to Ives, electric cars greatly benefit from various policies seeking to stimulate their adoption, and that would likely be reduced or removed under Trump.
EVs are still highly dependent on favorable conditions offered by the government, with the potential impact – and fragility – of a concentrated national green push best seen in countries like Norway.
Despite the likely damage caused to the overall sector, the Wedbush analyst also concluded that a second Trump presidency would vicariously aid Elon Musk’s Tesla Motors (NASDAQ: TSLA).
Unlike its competitors in the Western world, Tesla benefits from economies of scale as it has already achieved sufficiently high production figures.
For example, Elon Musk’s EV maker delivered nearly 400,000 vehicles in the first quarter (Q1) of 2024, while the Lucid Group (NASDAQ: LCID) shipped 200 times less – 1,967.
Tesla Motors would also benefit from Trump’s promised protectionist tariffs as its all of its biggest potential rivals – such as BYD – are Chinese EV makers.
Tesla stock price chart
Whatever the future may hold, Tesla Motors appears to slowly be exiting the EV winter as its delivery figures – while still below previous numbers and long-term forecasts – have started recovering, and its stock has experienced a proper renaissance, even turning green in the year-to-date (YTD) chart for the first time in 2024 this July.
Despite the current positive developments and the possible boons of a Trump victory, Tesla’s rally remains fraught as the stock is both overbought and highly susceptible to news, as evidenced by its massive, 8.44% drop in the last full trading session in the wake of the ‘Cybercab’ event delay.
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