President-elect Donald Trump’s transition team is moving to eliminate the $7,500 electric vehicle (EV) tax credit, according to sources cited by Reuters.
Contained in outgoing president Joe Biden’s Inflation Reduction Act (IRA), the EV tax credit is intended to support EV adoption as part of the green-energy transition.
Trump, who has expressed contempt for electric vehicles, has previously signalled that he will scrap the credits.
The plan to end the EV credit is reportedly led by an energy-policy team under Trump, which includes Continental Resources founder Harold Hamm and North Dakota Governor Doug Burgum.
It puts Trump in a unique position given one of his most powerful and ardent supporters, Elon Musk, owns Tesla Inc (NASDAQ:TSLA), the largest EV maker in the world.
However, it is possible that Tesla will benefit from these credits being scrapped as the move could have a far more negative impact on Tesla’s rivals.
Tesla shares have shed more than 5% in value today while its rival Rivian’s shares have dipped by nearly 12%.