US President-elect Donald Trump’s transition team is planning to kill a $7,500 consumer tax credit for electric-vehicle purchases as part of broader tax-reform legislation, Reuters news agency has reported, citing two sources with direct knowledge of the matter.
Ending the tax credit could have grave implications for an already stalling electric vehicle (EV) transition in the United States. And yet representatives of Tesla – by far the nation’s largest EV seller – have told a Trump transition committee that they support ending the subsidy, said the two sources, who spoke on condition of anonymity.
Tesla CEO Elon Musk, one of Trump’s biggest backers and the world’s richest person, said earlier this year that killing the subsidy might slightly hurt Tesla sales, but would devastate its US EV competitors, which include legacy automakers such as General Motors.
Shares of Tesla fell 5.5 percent to $311.77 in afternoon trading on Thursday.
Repealing the subsidy, which has been a signature measure of President Joe Biden’s Inflation Reduction Act (IRA), is being discussed in meetings by an energy-policy transition team led by billionaire oilman Harold Hamm, founder of Continental Resources, and North Dakota Governor Doug Burgum, the two sources said.
The group has had several meetings since Trump’s November 5 election victory, including some at his Mar-a-Lago estate in Florida, where Musk has also spent considerable time since the election.
Representatives of Tesla, GM, Ford, Stellantis and the Trump transition team did not immediately respond to requests for comment.
The Alliance for Automotive Innovation, a trade group representing nearly all major automakers besides Tesla, also did not immediately respond. The alliance last month in an October 15 letter urged the US Congress to retain EV tax credits, calling them “critical to cementing the US as a global leader in the future of automotive technology and manufacturing.”