On multiple occasions, Donald Trump has criticized the support for electric vehicles, He said that it is harmful to the American car market. However, he expressed his support for Elon Musk and Tesla.
Trump's Stance on EV Policies: A Boost for Tesla or a Setback for the Industry?
According to Politico, citing experts in the electric car industry, they doubt that Trump's relationship with Musk will affect his promises to roll back the Biden administration's regulatory policies on Evs. he is expected to oppose tax breaks and other federal incentives in the Inflation Reduction Act.
Trump and GOP members argue that such policies favor the wealthy people and aid China, which controls the supply chains for materials like electric vehicle batteries.
On the other hand, Some analysts think that Tesla, which is already profitable, may gain from the removal of tax exemptions, and this gives it an advantage over competing companies like General Motors and Ford, which heavily relies on these tax exemptions to increase their electric car sales.
However, in the short term, this will ultimately lead to a decline in electric car sales in the United States.
Trump’s Tariff Plan: Protecting U.S. Industries or Risking Global Retaliation?
“Other countries are going to, finally, after 75 years, pay us back for all that we’ve done for the world,” Trump declared during September's presidential debate.
Trump has vowed to impose tariffs of up to 60% on Chinese imports, a move that has sparked widespread debate. Such tariffs, if enacted, could potentially shield U.S. companies like Tesla from competition posed by cheaper Chinese-made electric vehicles. Worth noting that Tesla currently dominates the U.S. market with a 48% share, positioning it as a leader in the domestic EV sector.
However, these tariffs are likely to come with trade-offs. They could significantly increase production costs for U.S. EV manufacturers, including Tesla, which relies heavily on lithium-ion batteries and other components sourced from Chinese factories.
China is unlikely to sit idly by. but it’s expected it will take retaliatory measures, such as counter-tariffs or restrictions on American businesses operating in China. Tesla itself could become a target, especially given that its CEO to hold role in Trump's administration—played a pivotal role in supporting Trump’s election campaign.
China’s importance to Tesla’s global strategy cannot be overstated. In 2023, the company’s sales in China accounted for 22.5% of its total revenue, underscoring the critical role of the Chinese market in Tesla’s growth trajectory.
As tensions escalate between the two economic superpowers, the question remains: will these tariffs deliver the intended protection for American industries, or will they backfire by disrupting global supply chains and exposing U.S. companies to further risks?
Tesla's Self-Driving Ambitions And Regulatory Hurdles
Tesla is striving to secure regulatory approval for its full unsupervised self-driving (FSD) program and its vision of robotaxis. Some analysts believe Elon Musk’s evolving relationship with President-elect Donald Trump could potentially accelerate or influence the regulatory process, which has faced significant delays due to strict safety standards and concerns over the readiness of autonomous driving systems.
During Tesla’s most recent earnings call, Musk expressed optimism about the rollout of autonomous taxis in California and Texas next year. "And we do expect to roll out ride-hailing in California and Texas next year to the public," Musk said. "Now, California is somewhere, there's quite a long regulatory approval process. I think we should get approval next year but it's contingent upon regulatory approval. Texas is a lot faster so it's, we'll definitely have available in Texas and probably have it available in California, subject to regulatory approval."
However, the path forward may be more complicated than Musk suggests. Historically, there has been a gap between Musk’s ambitious statements and actual outcomes. The National Highway Traffic Safety Administration (NHTSA) recently launched an investigation into Tesla’s Full Self-Driving system after reports of accidents in low-visibility conditions, including one fatal incident involving a pedestrian. This investigation covers approximately 2.4 million Tesla vehicles produced between 2016 and 2024.
Given the ongoing probe, it is unlikely that NHTSA will approve any models lacking pedals or a steering wheel in the near future. The investigation’s timeline and findings will play a pivotal role in shaping the future of autonomous driving in the U.S.
In the end, Tesla's future sits at a crossroads, shaped by political shifts and market challenges. Musk’s bold ambitions may find both opportunities and obstacles under a Trump administration. As the EV industry evolves, only time will reveal whether Tesla emerges stronger or faces a bumpy ride ahead.
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