Donald Trump's return to the White House has stoked optimism on Wall Street, where his business-friendly agenda is expected to juice economic growth and loosen regulations that nibble away at corporate profits.

Electric vehicle makers, however, face a hazier outlook than most other businesses. Trump's rhetoric and campaign promises have put him squarely at odds with America's electric vehicle makers and the outgoing Biden administration, which expended ample effort to promote electrification. But the president-elect's close ties to Tesla (TSLA) CE♛O Elon Musk cast doubt on how thoroughly he will carry out his promises.

What Trump Has Said About EVs

Trump made his disdain for electric vehicles clear on🔯𝔍 the campaign trail. He said they were too expensive and insisted no one wanted to buy them because of their inadequate range. 

He called Biden-era electrification efforts part of “the Green New Scam,” a play on the “Green New Deal,” a set of policy proposals meant to address climate change. He’s said he would “end the electric vehicle mandate on day one,” referring to a recent vehicle emissions standards rule from the 澳洲幸运5官方开奖结果体彩网:Environm♚ental Protection Agency (EPA) that requires U.S. automakers to significantly lower their vehicles’ emissions over the next decade.

Trump suggested throughout the campaign that this and other EV policies were killing American jobs to the benefit of China and Mexico.

What Trump's Expected To Do

Trump is expected to kill the existing $7,500 EV tax credit, putting an electric car out of reach for more consumers and subsequently boosting sales of combustion engine models. That could benefit Detroit’s Big Three automakers—Ford (F), General Motors (GM), and Stellantis (STLA)—whose gas-powered cars are far more profitable than their electr🌠ic models.

Trump’s EPA is also likely to rescind this year’s emission standards rule, taking some of the pressure off the Big Thr𝓡ee automakers to continue their expensive electrificatꦦion efforts.

However, 澳洲幸运5官方开奖结果体彩网:Elon Musk, Trump’s most prominent backer in the last months of the election cycle, could deter him from completely scrapping all of Biden’s EV initiatives. And a Republican-led Congress could protect the billions of dollars earmarked by Biden-era legislation to finance the construction of EV and battery plants in red states.

Who Benefits from a Trump Presidency?

“We believe the Trump presidency is a clear overall negative for the EV industry,” wrote Wedbush analysts last week.

Bank of America analysts on Friday downgraded electric truck maker Rivian’s (RIVN) stock, citing the possibility of regulatory changes as a key reason. After Trump’s re-election, the analysts wrote, “it could become more challenging for consumers to access IRA credits and there is potential for a disruption in regulatory credit pricing, which would put profitability further under pressure.”

The outlook for electric-only manufacturers like Rivian and Tesla could hinge on EV credits, which they sell to competitors to offset their gas-powered vehicle sales. Rivian last week forecast it would sell $300 million of regulatory credits this year. Tesla has sold more than $2 billion of credits this year alone.

Tesla, which is less reliant on c𓆉redits than smaller upstarts, could even benefit from less government support for EVs, according to Wedbush.

Tesla’s “unmatched” scale and longer history of making profitable EVs, could give it “a clear competitive advantage in a non-EV subsidy environment.” Tesla’s lead in the U.S. market may also be buffered by higher tariffs on Chinese imports, which could “continue to push away cheaper Chinese EV players (BYD, Nio, etc.) from flooding the US market over the coming years.”