As Americans prepare to cast their votes in the upcoming presidential election between former President Donald Trump and Vice President Kamala Harris, the automotive industry watches closely as the future of electric vehicles hangs in the balance. While EV adoption continues to grow globally amid stringent emissions regulations, the political implications remain significant.
Wedbush analyst Dan Ives has outlined distinct scenarios for the EV industry based on the election outcome. According to Ives, a Trump victory would likely prove detrimental to the broader EV sector, with the probable elimination of current tax incentives provided under the Inflation Reduction Act. However, Tesla CEO Elon Musk’s close relationship with Trump could potentially give the company an edge in a market without EV subsidies.
Yet Ives cautions that a Trump presidency could create significant challenges for Tesla in China, where the company derives approximately 40% of its deliveries. The analyst anticipates that Trump’s harder stance on Chinese trade policy could trigger retaliatory measures from Beijing, potentially disrupting Tesla’s operations at its Shanghai Gigafactory.
On the regulatory front, Ives suggests that Trump’s administration might expedite Tesla’s autonomous driving initiatives. This could accelerate the timeline for Tesla’s Full Self-Driving (FSD) technology and other autonomous projects, potentially aligning with China’s autonomous vehicle development schedule.
In contrast, a Harris victory would likely maintain and potentially expand current EV incentives, with her administration expected to prioritize electric vehicle adoption. The Harris campaign has emphasized building upon existing policies to strengthen American industries, particularly in EV and battery supply chains.
However, Ives notes that while a Harris presidency would benefit the entire EV industry, it might not specifically advantage Tesla. Traditional automakers like General Motors, Ford, and Stellantis, who have made substantial investments in electric vehicles, could see equal or greater benefits under a Harris administration.
Regardless of the election outcome, Ives believes Musk’s public alignment with Trump during the campaign cycle could have lasting implications for Tesla. The analyst suggests that this political positioning might influence some customers’ future purchasing decisions, though the current impact appears limited.
Bank of America analyst John Murphy adds another dimension to the electoral implications, noting that a Trump presidency could weaken the California Air Resources Board’s authority to set emission standards. Murphy also highlights that both candidates might take strong positions on trade agreements, particularly regarding the USMCA (United States-Mexico-Canada Agreement), with Trump potentially taking a more aggressive stance on preventing Chinese products from entering through Mexico.
Recent polling by The Detroit News indicates that voter opinions on EV policy remain divided, even as the technology becomes more mainstream. Despite the political discourse surrounding electric vehicles, the industry’s trajectory appears set to be significantly influenced by the upcoming election’s outcome, with both candidates representing distinctly different approaches to EV policy and regulation.
While Musk positions Tesla as more of an “autonomy and robotics company” than an EV manufacturer, the political landscape shaped by the election will likely have far-reaching effects on both aspects of the business, from manufacturing and trade relations to regulatory oversight of autonomous technology development.