Tesla, Rivian, and Lucid Shares Plummet as Trump's Anti-EV Agenda Unfolds

As President Donald Trump kicked off his second term, investors braced for impact as the new administration unveiled its anti-EV agenda. Shares of Tesla (TSLA), Rivian (RIVN), and Lucid (LCID) tumbled Thursday, reflecting concerns about the potential negative effects of Trump's proposed policies on the electric vehicle (EV) industry.

Trump's executive order, titled "Unleashing American Energy," aims to eliminate "unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies." This includes the elimination of the $7,500 federal tax credit for EV purchases, which has been a significant driver of EV adoption in the United States.

The proposed elimination of the EV tax credit could make electric vehicles less affordable for consumers, potentially reducing demand for these vehicles. This could have a significant impact on the financial performance of EV manufacturers like Tesla, Rivian, and Lucid, as well as other EV startups and established automakers that have been investing in EV technology.

Tesla, which has been the dominant player in the U.S. EV market, could be particularly affected by the elimination of the EV tax credit. The company's vehicles are already more expensive than many of its competitors, and the loss of the tax credit could make them even less affordable for consumers. However, Tesla's strong brand, innovative technology, and extensive charging infrastructure could help it maintain its market leadership in the face of potential policy changes.

Rivian and Lucid, on the other hand, are newer players in the EV market and have not yet achieved the same level of scale and brand recognition as Tesla. The elimination of the EV tax credit could make their vehicles less affordable, potentially impacting demand in the short term. In the long term, Rivian and Lucid's survival and growth will depend on their ability to innovate, reduce production costs, and maintain consumer demand.



Trump's proposed tariffs on imports, particularly from China, could also have a significant impact on the supply chains and production costs of EV manufacturers like Rivian and Lucid. Many EV components, such as batteries and electronic parts, are sourced from China. A 60% tariff on Chinese imports, as proposed by Trump, would increase the cost of these components, making it more expensive for Rivian and Lucid to produce their vehicles. This could lead to supply chain disruptions and potential shortages of critical components.

Increased production costs could lead to higher vehicle prices or reduced profit margins, making it more difficult for these companies to compete with established automakers and other EV startups. The potential relocation of production facilities to countries with lower tariffs could also lead to delays in production and increased costs.

As investors grapple with the potential impacts of Trump's anti-EV agenda, it is clear that the EV industry faces significant challenges in the short term. However, the long-term prospects for the EV industry remain strong, as consumer demand for electric vehicles continues to grow and technological advancements make EVs more affordable and accessible.

In conclusion, Trump's proposed elimination of EV tax credits and incentives, as well as his proposed tariffs on imports from China, could have a significant impact on the financial performance of EV manufacturers like Tesla, Rivian, and Lucid. However, the long-term prospects for the EV industry remain strong, and these companies can make strategic adjustments to mitigate the potential negative effects of Trump's anti-EV policies.