Tesla Stock Falls After Trump Revokes EV Policy
Tesla (TSLA) stock tumbled over 3% early Tuesday, reversing premarket gains on the first trading day since President Donald Trump took office and scrapped a pro-EV policy.
Trump revoked 78 executive orders issued by President Joe Biden, including one that mandated half of new US cars manufactured be electric by 2030.
Other EV stocks also fell, with Lucid (LCID) dropping nearly 7% and Rivian sliding 5%. However, General Motors (GM) and Ford (F) stocks rose.
Trump also directed his administration to eliminate "unfair subsidies" for EVs. The Biden administration had provided grants and tax credits funded by the Inflation Reduction Act to bolster the electric vehicle industry.
"Loss of the EV tax credit is not trivial. I mean, $7,500 is not trivial," said Joseph Shapiro, UC Berkeley associate professor of economics.
Tesla CEO Elon Musk believes the company will not be significantly impacted by the rollbacks. He stated that it would have a "devastating impact" on competitors but "long term probably actually helps Tesla."
Despite Tuesday's decline, Tesla shares have gained over 60% since Trump's election victory in November. Laura Bratton is a reporter for Yahoo Finance. Follow her on Bluesky @laurabratton.bsky.social.