With Trump taking away the EV mandate from Tesla , will that have a major impact on TSLA stock price

``` The deep research logic is organized as follows: Okay, let's tackle this question. The user is asking if Trump removing the EV mandate will have a major impact on Tesla's stock price. First, I need to look at the references provided. There are several articles from 2025 discussing the tax bill and its implications for Tesla. From the references, I see that the tax bill eliminates the federal EV tax credit, which is a big deal for Tesla. The articles mention that this could reduce Tesla's net profit by around $1.2 billion, according to JPMorgan. That's a significant hit. Also, sales have already slumped in Europe, China, and key U.S. markets like California. The user's profile shows they're interested in emerging tech and have a medium to long-term horizon, so they might be concerned about Tesla's future growth. The user is also short on TSLA and planning to cover, so they're looking for confirmation if this news is a catalyst. The stock dropped over 9% on the news, which is a clear market reaction. The EV tax credit phase-out is happening much earlier than expected, which affects Tesla's margins. Plus, the removal of the mandate might reduce incentives for buyers, leading to lower sales. I should structure the answer by first stating the conclusion that yes, it will have a major impact. Then break down the financial impact, market reaction, and strategic implications. Make sure to cite the JPMorgan analysis and the stock price drop. Also, mention the competition from BYD and others, which adds pressure. The user's interest in technical analysis might appreciate the mention of the stock's recent performance and potential for further volatility. Need to ensure all points are backed by the references, using the exact citations. Also, keep the language clear and concise, avoiding any unsupported claims. The user's focus on emerging tech means they might be looking for how this affects Tesla's long-term position, so include the strategic risks and opportunities. Finally, wrap it up with a conclusion that ties everything together, reinforcing the immediate and long-term impacts on the stock price. Make sure to use the required markdown tables and visualizations where needed, but since the user's question is about the impact, the visualization for the query "Tesla financial impact of EV tax credit removal 2025" should be included after the relevant section. ``` ### **Conclusion** **Yes**, the removal of the EV mandate and related tax credits under Trump’s tax bill will have a **major impact on Tesla’s stock price**. The immediate financial and market risks, combined with long-term strategic challenges, suggest **significant downside pressure** for TSLA in the near term. However, Tesla’s ability to adapt and its leadership position in the EV market could mitigate some risks over time. --- ### **Analysis** #### **1. Financial Impact of EV Mandate Removal** The elimination of the federal EV tax credit and accelerated phase-out of incentives will directly reduce Tesla’s profitability and market competitiveness: | Metric | Impact | |----------------------------|-------------------------------------------------------------------------| | **Net Profit Hit** | JPMorgan estimates a **$1.2 billion reduction** in Tesla’s 2025 net profit . | | **EV Sales Pressure** | Tesla sales have already declined in key markets (Europe, China, U.S.) due to political backlash and reduced incentives . | | **Market Share Risk** | Competitors like BYD and traditional automakers (Volkswagen, Ford) are gaining ground as Tesla’s brand image weakens . | |code|Ticker|Name|Date|Total Revenue YoY|Total Revenue|market_code| |---|---|---|---|---|---|---| |TSLA|TSLA.O|Tesla|2024 Q2|2.298712239740041|2.55E10|185| |TSLA|TSLA.O|Tesla|2024 Q3|7.845824411134903|2.5182E10|185| |TSLA|TSLA.O|Tesla|2024 Q4|2.1456669448086783|2.5707E10|185| |TSLA|TSLA.O|Tesla|2025 Q1|-9.229613633162764|1.9335E10|185| #### **2. Market Reaction and Stock Price Volatility** Tesla’s stock has already reacted negatively to the news: | Metric | Data (June 5, 2025) | |----------------------------|-----------------------------------------------------------------------| | **Stock Price Drop** | -12.07% to $291.97 . | | **MACD Signal** | -12.73 (indicating bearish momentum) . | | **Analyst Downgrades** | Average price target reduced to $349.95 (from $390) . | #### **3. Strategic Risks and Opportunities** - **Short-Term Risks**: - Loss of **$7,500 tax credit** for buyers of Tesla models . - Regulatory uncertainty as California’s EV mandate is also repealed . - Brand reputation damage due to Musk’s political alignment with Trump . - **Long-Term Opportunities**: - Tesla’s **autonomous driving (robotaxi) ambitions** remain unaffected . - Potential to **innovate around subsidies** (e.g., carbon credits, battery recycling) . --- ### **Conclusion** The removal of the EV mandate and tax credits poses **immediate financial and market risks** for Tesla, with a high likelihood of further stock price declines. However, Tesla’s leadership in EV technology and its ability to pivot strategically could limit long-term damage. Investors should closely monitor **sales data, regulatory developments**, and **Musk’s political stance** for updates.