What Happened: Musk acknowledged that a Trump Presidency and possible strike down of the EV subsidies and tax credits put forth by IRA will have some impact on the EV industry. The impact would be slight for Tesla and devastating for its competitors, Musk said.
“But long term probably actually helps Tesla, would be my guess, yes,” Musk said, while adding that the company is relying on vehicle autonomy to boost value. A possible repeal of the IRA and tax credits on the purchase of EVs, Musk said, is not related to autonomy.
The CEO also said that the company is postponing plans for a gigafactory in Mexico due to concerns about potential heavy tariffs on vehicles produced in the neighboring country if Trump is re-elected.
“Trump has said that he will put heavy tariffs on vehicles produced in Mexico. So it doesn’t make sense to invest a lot in Mexico if that is going to be the case,” Musk said. “So we kind of need to see where the things play out politically.”
Why It's Important: Even as Musk has officially endorsed the Republican presidential nominee, Trump, analysts are divided about the implications of a Trump presidency for the EV maker.
Tesla bull Dan Ives previously said that a second term for Trump would be an overall negative for the EV industry, given the likelihood of the EV rebates/tax incentives getting pulled. But it is a potential positive for Tesla, given the company "has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment," he said.
Musk, however, has previously talked about sharing a good relationship with Trump.
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