Donald Trump won the United States Presidential Election last month and immediately gave billionaire Elon Musk a position on his staff as one of the co-leads of the Department of Government Efficiency. And it sounds like Trump is prepared to make a move that could very much help Musk’s business.
According to a report from Reuters, the Donald Trump administration is planning to get rid of the current tax credit that consumers receive for purchasing electric vehicles.
“President-elect 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, two sources with direct knowledge of the matter told Reuters,” Reuters reported last month.
While this might seem like bad news for Musk, who is the founder and CEO of the electric car manufacturer Tesla, it’s likely this will actually help Tesla by hurting its competitors more.
In fact, Reuters reported that Musk and Tesla are actually in support of getting rid of the tax credit.
“Ending the tax credit could have grave implications for an already stalling U.S. EV transition. And yet representatives of Tesla, opens new tab – by far the nation’s biggest EV maker – have told a Trump-transition committee they support ending the subsidy, said the two sources, speaking on condition of anonymity,” Reuters reported.
“Tesla CEO Elon Musk, one of Trump’s biggest backers and the world’s richest person, said in July that killing the subsidy might slightly hurt Tesla sales but would be ‘devastating’ to its U.S. EV competitors, which include legacy automakers such as General Motors.”
Since Tesla already has strong sales and a strong presence in the market and established manufacturing and distribution channels, the tax credit would not hurt them nearly as much as it would hurt up-and-coming electric vehicle manufacturers.
So while Trump seems to be rewarding Musk’s loyalty by giving him a position in the government, it also seems like he’s making some moves to help him out financially, too.
Musk did get some bad news this week, however, as a judge once again denied Elon Musk a $56 billion compensation package from Tesla.
[Reuters]
