Will Donald Trump turn out to be bad luck for Elon Musk? JPMorgan says Tesla's profits could tank by 40%; cites these reasons
President-elect Donald Trump.
ET Year-end Special Reads
Stocks to buy in 2025: 66 ideas from top brokerages for your new year portfolio
What does 2025 hold for India's IT services sector?
2025 may be the year of EVs in India, dominated by SUV launches
How Trump's policies could impact Tesla's profit?
JPMorgan analysts estimate that the elimination of electric vehicle (EV) tax credits and subsidies could reduce Tesla's profits by up to 40%, equating to a potential loss of approximately $3.2 billion. These subsidies have been crucial in making EVs more affordable and stimulating consumer demand. Eliminating them may lead to higher vehicle prices, potentially reducing sales and profits.
Also Read :Trouble ahead for Donald Trump? As Speaker Mike Johnson scrapes through, GOP lawmakers could prove difficult for the President-elect
Market Competition in EV Intensifies
In addition to policy changes, Tesla is facing increased competition in the EV market. Ford and General Motors (GM) have reported stronger growth in EV sales compared to Tesla, highlighting the intensified competition. Ford sold 30,176 all-electric vehicles in Q4, with an annual growth of 35% for their EV sales, leading to a positive market response and a 2.3% increase in stock price. GM sold about 44,000 EVs in Q4, showing a significant year-over-year increase of 126% and resulting in a 0.8% rise in stock price.
Analysts are divided on Tesla's future. Some maintain an optimistic outlook, citing potential regulatory support under the new administration.
