US auto stocks including Tesla, Rivian and General Motors fell on Thursday after a report said that President-elect Donald Trump planned to end the consumer tax credit for electric vehicles.
Donald Trump’s transition team is planning to kill the $7,500 consumer tax credit for electric-vehicle purchases as part of broader tax-reform legislation, Reuters reported, citing unidentified sources with direct knowledge of the matter.
According to the report, representatives of Elon Musk-led Tesla also support ending the tax credit.
Tesla stock price fell 5.77% to close at $311.18, while Rivian Automotive shares saw biggest drop since February 22, plunging 14% to end at $10.31. Lucid stock price tumbled 5% to $2.08. General Motors stock eased 0.16% and Ford Motor shares declined 0.32%.
The sell-off spread to Asian markets as well. Battery maker LG Energy Solution shares cracked as much as 10% at the open of Seoul trading, while SK Innovation Co. stock dropped 8%.
In July, Tesla CEO Elon Musk said that killing the subsidy might slightly hurt Tesla sales but would be “devastating” to its US. EV competitors, which include legacy automakers such as General Motors.
Musk on Thursday posted on his X social-media site that the US should “end all government subsidies, including those for EVs, oil and gas.”
Repealing the subsidy—a key component of Democratic President Joe Biden’s Inflation Reduction Act (IRA)—is under discussion by an energy-policy transition team, according to a Reuters report citing two sources. The team is led by billionaire oilman Harold Hamm, founder of Continental Resources, and Republican North Dakota Governor Doug Burgum.
The group has convened multiple times since Trump’s November 5 election victory, including meetings at his Mar-a-Lago club in Florida, where Elon Musk has also been a frequent visitor post-election, said the report.
(With inputs from Reuters)
