Tesla's stock took a significant hit on Monday, plummeting 5% as investors grew concerned over the potential impact of former President Donald Trump's economic policies on the electric vehicle (EV) industry if he wins the upcoming election. The sharp decline in Tesla's share price reflects growing unease about the future of EVs and clean energy under a potential Trump administration.
At the heart of investors' worries is Trump's stated intention to eliminate or reduce the $7,500 federal tax credit for new EV purchases, a critical incentive that has helped spur consumer adoption of EVs like Tesla's vehicles. The former president has also signaled a desire to roll back tailpipe emissions regulations aimed at increasing EV sales, further jeopardizing the industry's growth prospects.
Moreover, Trump's proposed tariffs on Chinese imports and his adversarial stance toward Beijing could disrupt Tesla's operations and supply chain, as the company relies heavily on China both as a manufacturing hub and a major market. This uncertainty has cast a shadow over Tesla's ability to maintain its momentum in the critical Chinese market, where it faces intense competition from domestic EV rivals like BYD, Xpeng, and Li Auto.