Trump’s statement on electric vehicles:
- President Donald Trump vowed to eliminate the electric vehicle mandate in his inaugural address.
- However, there is no federal mandate on electric vehicles, only EPA rules requiring auto makers to sell battery electric vehicles to avoid emissions-related fines.
Impact on Tesla and the US auto industry:
- Tesla’s zero-emission vehicle (ZEV) credits, which generate almost $10 billion in sales, are tied to California Air Resources Board (CARB) standards.
- Ending CARB’s authority to regulate state emissions would require a lengthy legal process.
- A federal challenge to CARB could have a big impact on Tesla’s ZEV credit sales.
- Easing EPA standards could better match EV demand with EV regulations.
Potential consequences:
- Removing the federal EV purchase tax credit worth up to $7,500 for qualifying EV purchases would require legislation.
- The “Green New Deal” could also mean removing the federal EV mandate, which would require a rule-making process.
- A disruption in regulatory credit pricing could affect EV start-ups like Rivian Automotive.
Market reaction:
- Tesla stock was up 0.5% in after-hours trading at $428.55.
- S&P 500 and Dow Jones Industrial Average futures were rising 0.2% and 0.3%, respectively.
- Tesla stock has risen about 70% since the Nov. 5 US presidential election, despite the likelihood of reduced federal support.