'Not trivial': EV sales could drop nearly 30% if Trump repeals tax credit

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'Not trivial': EV sales could drop nearly 30% if Trump repeals tax credit

Yahoo Finance11-22 03:41

Auto industry execs, fasten your seatbelts. If President-elect Donald Trump and his team repeal the $7,500 federal tax credit for EVs, as reported, the fallout will be massive. The Biden ...

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If President-elect Donald Trump and his team repeal the $7,500 federal tax credit for EVs, as reported, the fallout will be massive. \nThe Biden ...</p>\n\n<a href=\"https://finance.yahoo.com/news/not-trivial-ev-sales-could-drop-nearly-30-if-trump-repeals-tax-credit-194135070.html\">Source Link</a>\n\n</div>\n","source":"yahoofinance","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>'Not trivial': EV sales could drop nearly 30% if Trump repeals tax credit</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n'Not trivial': EV sales could drop nearly 30% if Trump repeals tax credit\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-11-22 03:41 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://finance.yahoo.com/news/not-trivial-ev-sales-could-drop-nearly-30-if-trump-repeals-tax-credit-194135070.html><strong>Yahoo Finance</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Auto industry execs, fasten your seatbelts. If President-elect Donald Trump and his team repeal the $7,500 federal tax credit for EVs, as reported, the fallout will be massive. \nThe Biden ...</p>\n\n<a href=\"https://finance.yahoo.com/news/not-trivial-ev-sales-could-drop-nearly-30-if-trump-repeals-tax-credit-194135070.html\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"TSLA","symbol_name":"特斯拉","start_time":0,"source_url":"https://finance.yahoo.com/news/not-trivial-ev-sales-could-drop-nearly-30-if-trump-repeals-tax-credit-194135070.html","article_id":"2485444201","we_media_id":null,"thumbnails":["https://s.yimg.com/uu/api/res/1.2/VsKMY_SIcbZZdzTwoAWp3A--~B/aD0zODEzO3c9NTcxOTthcHBpZD15dGFjaHlvbg--/https://s.yimg.com/os/creatr-uploaded-images/2024-11/b8c00d80-a832-11ef-bbd7-41abda3fc06e"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2485444201","pubTimestamp":1732218095,"sourceInfo":{"source_id":"yahoofinance","name":"雅虎金融"},"weMediaInfo":null,"summary":"Auto industry execs, fasten your seatbelts. If President-elect Donald Trump and his team repeal the $7,500 federal tax credit for EVs, as reported, the fallout will be massive.The Biden administration’s signature climate law, the Inflation Reduction Act, introduced the $7,500 EV tax credit for consumer vehicles and numerous others for commercial EVs and battery production, among other things.Last month in a new report dubbed “The Effects of ‘Buy American’: Electric Vehicles and the Inflation Reduction Act, researchers Joseph Shapiro, Hunt Allcott, and Felix Tintelnot quantified the tax credit effect.Joseph Shapiro, UC Berkeley associate professor of economics and co-author of the report, told Yahoo Finance.While repealing the tax credit would be damaging to near-term EV sales, there are possible ways to refine its effects for the better. Shapiro and his co-authors also noted that the federal EV tax credit as constructed is not very efficient.","collect":0,"end_time":0,"defaultTopTitle":"yahoo.com","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"TSLA":"特斯拉","F":"福特汽车","RIVN":"Rivian Automotive, Inc.","LCID":"Lucid Group Inc","GM":"通用汽车","TS":"泰纳瑞斯钢铁"},"translate_title":"“并非微不足道”：如果特朗普废除税收抵免，电动汽车销量可能会下降近30%","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"F":0.9,"GM":0.9,"LCID":0.9,"RIVN":0.9,"TS":0.9,"TSLA":0.9},"content_text":"Auto industry execs, fasten your seatbelts. If President-elect Donald Trump and his team repeal the $7,500 federal tax credit for EVs, as reported, the fallout will be massive. \nThe Biden administration’s signature climate law, the Inflation Reduction Act, introduced the $7,500 EV tax credit for consumer vehicles and numerous others for commercial EVs and battery production, among other things.\nSince the law’s inception in 2022, EV sales have taken off. In 2023, the first full year of the credit, EV sales jumped 46% year over year to 1.19 million, compared to 813,000 in 2022, according to Cox’s Kelly Blue Book.\nLast month in a new report dubbed “The Effects of ‘Buy American’: Electric Vehicles and the Inflation Reduction Act, researchers Joseph Shapiro, Hunt Allcott, and Felix Tintelnot quantified the tax credit effect.\nAfter constructing a model and running a simulation, the report found that EV sales in the US would drop 27% if the federal EV tax credit were removed, compared to a scenario with the EV tax credit in place. The report found this would lead to EV registrations falling to 867,00 EVs from 1.184 million with the tax credit in place — or 317,000 fewer EVs. \nBloomberg News was first to highlight the results of this report.\n“This specific scenario is take summer of 2023, take all the conditions — supply, demand, and take away the EV tax credits — how would sales fall?” Joseph Shapiro, UC Berkeley associate professor of economics and co-author of the report, told Yahoo Finance.\n\n\n\n  Trump target? The Hyundai Ioniq 9 is displayed at the AutoMobility LA Auto Show, Nov. 21, 2024, in Los Angeles. (AP Photo/Jae C. Hong)\n \n\n  ASSOCIATED PRESS\n \n\nWith EV sales growing nearly 40% year over year last year, losing the EV tax credit is a \"substantial change,\" Shapiro said. \"It's a rapidly growing market and relatively new technology, but [loss of the EV tax credit] is not trivial. I mean, $7,500 is not trivial,” Shapiro added.\nBut there are caveats here. Shapiro notes that while a 27% decrease is substantial, relative to what sales would be otherwise, it may not be that big of a deal. EV sales increased over 40% year on year in 2023, meaning sales could be at a “flatline” if the tax credit were repealed.\nThat being said, sales for this year are only trending up 10% year over year through Q3, according to Kelley Blue Book, indicating a significant impact, assuming sales trend at the same level in Q4.\nWhile repealing the tax credit would be damaging to near-term EV sales, there are possible ways to refine its effects for the better. Shapiro and his co-authors also noted that the federal EV tax credit as constructed is not very efficient.\nOne alternative: different subsidies for different vehicles. Certain bigger EVs create “large negative externalities” — meaning they're more likely to have fatal accidents in addition to high energy use. Smaller EVs get the same tax credit benefit despite being lightweight, better for safety, and demanding much less electricity.\n“We're giving the same $7,500 subsidy to most of those vehicles, and giving smaller subsidies to cars that have larger costs to society, larger externalities, that would make these subsidies more beneficial to society overall,” Shapiro said.\n\n\n\n  Take my tax credit, please: Elon Musk, also Tesla's chief, talks with President-elect Donald Trump before the launch of the sixth test flight of the SpaceX Starship rocket Tuesday, Nov. 19, 2024 in Boca Chica, Texas. (Brandon Bell/Pool via AP)\n \n\n  ASSOCIATED PRESS\n \n\nTweaks, if any, will be down the road, and that path is uncertain, given Trump's team is still in the process of being formed. For now, EV makers will probably have to deal with some potential bad news, with research showing over 300,000 fewer EVs sold with tax credit repeal. \nWall Street predicts automakers will have to find ways to pick up the slack somewhere — perhaps cutting into profits with deeper discounts.\n“All else equal, a removal of incentives would make EVs significantly more expensive, adding downward pressure to out-year volumes, assuming [original equipment manufacturers] do not compensate with incremental discounting,” Morgan Stanley’s Adam Jonas wrote in a note earlier this week.\nJonas and Morgan Stanley believe Lucid (LCID), Rivian (RIVN), and Tesla (TSLA) are “most exposed” to the loss of the tax credit. \nIn the long run, Morgan Stanley predicts that EV adoption will not slow, despite short-term hiccups.\n“While a slowing of EV adoption can provide valuable time for some legacy players to catch up, we still expect EV penetration to keep rising long term as innovation and scale will bring lower cost and higher performance products in the long term,” Jonas wrote.\nPras Subramanian is a reporter for Yahoo Finance. You can follow him on X and on Instagram.\nClick here for the latest stock market news and in-depth analysis, including events that move stocks\nRead the latest financial and business news from Yahoo Finance","kind":null,"is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0},"commentList":[],"hasMoreComments":false,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false}}