As the Biden administration prepares to hand over to the new regime, the EV sector is waiting to see how Tesla CEO Elon Musk will affect American electric vehicle policy. Despite Donald Trump’s outspoken criticism of battery electric vehicles (BEVs), Musk endorsed the GOP Presidential candidate and reportedly spent more than $100 million on the Trump campaign, in addition to appearing at several of his rallies.
Trump’s victory over Vice President Kamala Harris will likely propel Musk into the corridors of power and put him in a position of significant influence, particularly regarding EV policies. His controversial decision to support President-elect Donald Trump’s presidential campaign could now have major ramifications for Tesla and the electric vehicle industry as a whole.
Some of the electric vehicle issues Musk could influence include the Trump administration’s EV tax credit and Chinese EV tariff strategies. The Biden administration imposed a 100% import tariff on electric vehicles imported from China to protect local automakers from ‘unfair competition’. This could put carmakers like Tesla, which draw a large portion of their revenue from the Chinese market, at risk.
The EV industry likely hopes that Musk will help steer the next administration’s EV policy decision in such a way that benefits the entire sector. However, Trump said during his campaign that he would roll back EV tax credits for American buyers and raise the tariffs imposed on Chinese goods. Furthermore, the incoming POTUS noted that he would get rid of several of the Environmental Protection Agency’s vehicle emissions standards, a move that would most likely stifle the electric vehicle industry’s growth.
When asked how he expected the electric vehicle industry to fare under a second Trump presidency, Musk said that Tesla would probably benefit but the broader auto sector likely wouldn’t benefit as much. In fact, the market’s anticipation of the Trump administration helping Tesla is so great that the Texas-based EV maker’s valuation jumped to over $1 trillion after the election, making Tesla more valuable than the rest of the Auto industry combined.
Some industry analysts say Elon Musk could convince the Trump administration to reduce the import tariffs on Chinese EV imports or even ease import tariffs on all Chinese goods. But the Tesla, X, and SpaceX CEO is much more likely to support eliminating the $7,500 tax credit for EV purchases in the U.S. This would make it harder for established carmakers like Ford and General Motors to introduce electrified versions of their existing vehicles and compete with Tesla.
With manufacturers like Mullen Automotive Inc. (NASDAQ: MULN) hitting new milestones, such as listing one of their cargo van models for rental in Florida, any influence that Musk can exert to ease the transition to electric vehicles will be a welcome boost.
NOTE TO INVESTORS: The latest news and updates relating to Mullen Automotive Inc. (NASDAQ: MULN) are available in the company’s newsroom at https://ibn.fm/MULN
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