Musk's Influence: A Boon for Tesla, A Challenge for Other EV Makers

Elon Musk's endorsement of Donald Trump and subsequent political influence could significantly impact the electric vehicle (EV) market, with Tesla potentially reaping substantial benefits while other EV makers face challenges. Musk's advocacy for ending EV tax credits and Trump's proposed changes to energy policy could reshape the competitive landscape, favoring Tesla over its competitors.

Musk's advocacy for ending the $7,500 EV tax credit could benefit Tesla more than its competitors. Tesla's profitability relies less on subsidies, with 43% of net income coming from government-required credits. Competitors like GM and Ford, still struggling to turn a profit on EV sales, would be more affected. Tesla's market share, currently 60%, could further increase as competitors scale back EV production. However, ending credits might also lower EV prices, potentially reducing Tesla's profits and market share.

Trump's administration could support Tesla's commercial truck production, such as the Semi, through federal grants and regulations. By cutting off federal grants for hydrogen fuel-cell trucks, it could help Tesla against the competition. This would hurt major truck makers and destroy electric truck startup companies, giving the long-delayed Tesla Semi time to catch up. Additionally, Trump's opposition to hydrogen vehicles could further boost Tesla's prospects in the truck market.


Musk's influence on Trump's trade policies, particularly tariffs, could significantly impact Tesla's operations and competition in the global EV market. Tesla's Shanghai plant, subject to Chinese government control, might face tariff-related challenges. Musk's support for trade barriers against Chinese EVs earlier this year, followed by his opposition to tariffs on EVs, indicates a complex stance. Trump's "beautiful tariffs" on Chinese goods could disrupt Tesla's Shanghai operations, while potentially benefiting Tesla's U.S. production. However, this could also disadvantage Tesla's competitors, both domestic and international, creating a more favorable market for Tesla.

Trump's proposed elimination of the $7,500 EV tax credit could significantly impact other EV makers besides Tesla. Traditional automakers like Ford and General Motors, which have been investing heavily in EV production, rely on these incentives to make their vehicles more affordable and competitive. Without the credit, these companies may struggle to maintain market share against Tesla, which has already begun to scale back its reliance on incentives. Moreover, the loss of the credit could discourage potential EV buyers, further hurting the sales of non-Tesla EV models.

In conclusion, Musk's influence on Trump's policies could significantly reshape the EV market, favoring Tesla over its competitors. While Tesla stands to gain from these changes, other EV makers may struggle to maintain market share and profitability. Investors should closely monitor the evolving political landscape and its impact on the EV market, as strategic decisions could be crucial in navigating this dynamic environment.