Trump's proposal to eliminate electric car subsidies could make Tesla more competitive

Tesla CEO Elon Musk recently voiced support for Donald Trump following an assassination attempt on the former president, confusing many fans due to Trump’s stance against electric vehicle (EV) subsidies.

Eliminating electric vehicle subsidies will have little impact on Tesla

During a recent earnings call, Musk commented that Trump’s potential removal of EV subsidies would harm other car manufacturers more than Tesla. He stated:

"This would be devastating for our competitors, with only a minor impact on Tesla. In the long run, it might actually benefit us."

Despite Trump’s criticism of Biden’s EV policies and his promise to end “forced EV policies” if elected, Musk dismissed concerns about the impact on Tesla’s sales, reiterating the company’s focus on AI and autonomous driving.

Musk himself has been expressing his opposition to subsidies on social media and advocates the elimination of subsidies in all industries.

Tesla’s Core Value

Musk emphasised that Tesla’s value lies in its focus on autonomous driving technology rather than reliance on subsidies.

“Tesla’s value is primarily in self-driving technology. Everything else is negligible by comparison,” he said.

PAC Formation

Following the assassination attempt on Trump, Musk denied reports of committing $45 million monthly to Trump but confirmed forming a political action committee.

Musk’s support for Trump puzzled some Tesla fans, who questioned how Trump’s election would benefit an EV company. Additionally, Trump’s VP candidate JD Vance proposed a bill to replace EV subsidies with a credit policy for fuel cars, though it is unlikely to pass.

Mexico Tariff and Factory Plans

Trump proposed high tariffs on cars made in Mexico, prompting Tesla to pause plans for a factory in Mexico until after the U.S. presidential election.

“Investing in Mexico doesn’t make sense with Trump’s proposed tariffs,” Musk said, adding that Tesla is boosting capacity at existing factories and planning to produce robotaxis at its Texas plant.