Plug Power stock falls as US EV demand weakens and Trump's EV credit rollback impacts industry

Plug Power's stock is down 25% YTD due to shrinking US EV demand and President Trump's rollback of the $7,500 tax credit. Automakers have cut prices and scaled back plans, while analysts flag Plug Power's cash burn and margin risks despite the company's stronger Q2 revenue. Ford and SK On have shifted strategy to address excess supply, and global EV sales surged 24% in June, driven by strong demand in China and Europe.

Plug Power (PLUG) stock has been under significant pressure, declining 25% year-to-date (YTD) as of July 2, 2025. The downturn is largely attributed to a combination of factors including shrinking U.S. electric vehicle (EV) demand and President Trump's rollback of the $7,500 tax credit for new U.S.-made EVs [1].

The U.S. House of Representatives approved Trump's "Big Beautiful Bill," which ended the $7,500 tax credit for new U.S.-made EVs. The credit expired on September 30, 2025, leading to a significant slowdown in U.S. EV sales. Automakers have responded by cutting prices and scaling back their plans to address the weakened demand [1]. Ford Motor (F) and South Korea's SK On have shifted their strategy to absorb excess supply, seeking outside buyers for their Kentucky battery plant [1].

Global EV sales, however, have continued to grow, with a 24% increase in June 2025, driven by strong demand in China and Europe [1]. In contrast, U.S. sales slipped 1% as the EV credit was eliminated, dampening momentum. The UK has pledged over $1 billion in subsidies and charging upgrades to boost EV adoption, while Trump's rollback of incentives and relaxed fuel economy rules threaten the growth of EV makers in the U.S. [1].

Analysts have flagged Plug Power's cash burn and margin risks despite the company's stronger Q2 revenue. JPMorgan analyst Bill Peterson maintained a Neutral rating on Plug Power after the company’s second-quarter results showed stronger-than-expected revenue but heavier cash burn [1]. The company has made progress on orders, cost cuts, and projects, but margin uncertainty and balance sheet risks keep the stock's outlook cautious [1].

Plug Power's stock has seen significant fluctuations, with the price dropping to $1.60 on Tuesday and rebounding to $1.71 following the earnings report [1]. The company's focus on operational discipline, including better pricing, streamlined operations, and a more reliable hydrogen supply network, has led to notable improvements in gross margins [3].

Looking ahead, investors and analysts will closely monitor Plug Power's progress toward gross margin neutrality, the ramp-up of operational benefits from Project Quantum Leap, and the pace of hydrogen network expansion, including milestones for the Texas facility and new supply agreements [3].

References:
[1] https://www.benzinga.com/markets/tech/25/08/47214623/plug-power-stock-slides-as-trumps-ev-credit-rollback-and-weak-demand-shake-the-industry
[3] https://finance.yahoo.com/news/top-5-analyst-questions-plug-053129809.html