Trump's victory could sharply increase the cost of electric vehicles. Here's why.

As President-elect Donald Trump pledges to end the $7,500 tax credit for electric vehicle buyers, an electric vehicle maker and its billionaire owner fully support the idea and could even profit from it .

“Remove the subsidies, it will only help Tesla,” Tesla owner Elon Musk said in July on X, the social media platform he owns.

The credit for electric vehicle buyers has helped make the case for purchasing more climate-friendly vehicles, and when an earlier version of the tax credit was eliminated several years ago, Tesla reduced prices of its cars about half of the credit granted to its buyers. no longer received.

Tesla is the only automaker to generate profits on sales in the United States. Manufacturing electric vehicles is a losing proposition for the Big Three automakers like Ford and General Motors, which sell a fraction of electric vehicles compared to Tesla.

Once the electric vehicle tax credit is eliminated, the overall price of electric vehicles could fall, reducing Tesla's profits, instead of increasing the company's red ink as might be the case for automakers traditional automobiles that are still striving to gain a stronger foothold in the electric vehicle market. If traditional automakers cut production and sales of electric vehicles to reduce losses, electric vehicle buyers would have even fewer options, which would benefit Tesla.

Examining Elon Musk's influence on the Trump transition process 05:05

While Musk touted his support for eliminating the electric vehicle tax credit, Tesla's rivals in the auto industry signaled otherwise.

The Alliance for Automotive Innovation has insisted on maintaining the tax credit, telling lawmakers in an October letter that U.S. automakers are counting on it to compete with Chinese production of electric vehicles. Automakers around the world have invested billions in the transition to electric cars.

Additionally, the Zero Emission Transportation Association on Friday called on Trump to reconsider his decision, saying the tax credit has supported jobs in states that voted Republican, including Ohio, Kentucky, Michigan and Georgia .

“If the United States wants to continue to fight to attract these jobs here and truly compete to defeat China, there must be a demand signal – like the new clean vehicle tax credit – aligned with this goal, otherwise we risk undercutting. these investments and harm job growth in the United States,” ZETA Executive Director Albert Gore said Friday.

“The potential elimination of the federal electric vehicle tax credit by the Trump administration – without any other form of incentive to replace it – could derail the trajectory of electric vehicle sales in the United States,” analysts say. 'Edmunds.

Ford to idle F-150 Lightning factory for 7 weeks 01:57

Trump repeatedly pledged to eliminate what he called President Joe Biden's “EV mandate” during his campaign for the White House.

Although there is no such mandate in federal law, the Inflation Reduction Act passed under President Biden's term restored the credit for many electric vehicle purchases, while also granting low-interest loans to manufacturers building electric vehicle and battery factories.

The Trump transition team intends to eliminate the credit as part of a broader tax reform measure, according to a report published Thursday by Reuters, citing two sources with direct knowledge of the matter.

During his first term, the president-elect attempted to repeal the electric vehicle tax credit, which was expanded by President Biden in 2022.

Analysts who follow Tesla agreed with Musk's view that disappearing credit would only help his company.

“This is clearly negative for the electric vehicle industry on its face and would particularly hurt GM, Ford, Stellantis and Rivian,” wrote Daniel Ives, a technology analyst at Wedbush Securities. Conversely, “this will allow Tesla to further fend off competition from Detroit, as pricing, scale and scope are apples to oranges compared to the rest of the auto industry once credit tax for electric vehicles will have disappeared. »

Americans looking to buy an electric car should do so as soon as possible, advised Ivan Drury, director of Insights at Edmunds.

“The federal tax credit combined with reduced prices due to slowing sales momentum has contributed to electric vehicles being considered one of the best deals on the market in 2024. Today, with the reductions production, dwindling supply and a new wave of demand from those looking for one while they still can, it can be almost assured that the price of the electric vehicle you are considering will increase in the months to come,” Drury said.

More from CBS News

Kate Gibson

Kate Gibson is a reporter for CBS MoneyWatch in New York, where she covers business and consumer finances.

What Are The Main Benefits Of Comparing Car Insurance Quotes Online

LOS ANGELES, CA / ACCESSWIRE / June 24, 2020, / Compare-autoinsurance.Org has launched a new blog post that presents the main benefits of comparing multiple car insurance quotes. For more info and free online quotes, please visit https://compare-autoinsurance.Org/the-advantages-of-comparing-prices-with-car-insurance-quotes-online/ The modern society has numerous technological advantages. One important advantage is the speed at which information is sent and received. With the help of the internet, the shopping habits of many persons have drastically changed. The car insurance industry hasn't remained untouched by these changes. On the internet, drivers can compare insurance prices and find out which sellers have the best offers. View photos The advantages of comparing online car insurance quotes are the following: Online quotes can be obtained from anywhere and at any time. Unlike physical insurance agencies, websites don't have a specific schedule and they are available at any time. Drivers that have busy working schedules, can compare quotes from anywhere and at any time, even at midnight. Multiple choices. Almost all insurance providers, no matter if they are well-known brands or just local insurers, have an online presence. Online quotes will allow policyholders the chance to discover multiple insurance companies and check their prices. Drivers are no longer required to get quotes from just a few known insurance companies. Also, local and regional insurers can provide lower insurance rates for the same services. Accurate insurance estimates. Online quotes can only be accurate if the customers provide accurate and real info about their car models and driving history. Lying about past driving incidents can make the price estimates to be lower, but when dealing with an insurance company lying to them is useless. Usually, insurance companies will do research about a potential customer before granting him coverage. Online quotes can be sorted easily. Although drivers are recommended to not choose a policy just based on its price, drivers can easily sort quotes by insurance price. Using brokerage websites will allow drivers to get quotes from multiple insurers, thus making the comparison faster and easier. For additional info, money-saving tips, and free car insurance quotes, visit https://compare-autoinsurance.Org/ Compare-autoinsurance.Org is an online provider of life, home, health, and auto insurance quotes. This website is unique because it does not simply stick to one kind of insurance provider, but brings the clients the best deals from many different online insurance carriers. In this way, clients have access to offers from multiple carriers all in one place: this website. On this site, customers have access to quotes for insurance plans from various agencies, such as local or nationwide agencies, brand names insurance companies, etc. "Online quotes can easily help drivers obtain better car insurance deals. All they have to do is to complete an online form with accurate and real info, then compare prices", said Russell Rabichev, Marketing Director of Internet Marketing Company. CONTACT: Company Name: Internet Marketing CompanyPerson for contact Name: Gurgu CPhone Number: (818) 359-3898Email: [email protected]: https://compare-autoinsurance.Org/ SOURCE: Compare-autoinsurance.Org View source version on accesswire.Com:https://www.Accesswire.Com/595055/What-Are-The-Main-Benefits-Of-Comparing-Car-Insurance-Quotes-Online View photos