President Trump Terminates Green New Deal: What Does This Mean for Tesla and Other EV Automakers?

With a stroke of the pen shortly after his Jan. 20 inauguration, President Donald Trump signed an executive order titled “Unleashing American Energy.” This order could spell potentially grave news for Tesla and other EV automakers.

Within that order, language specifically stated that the termination of the so-called Green New Deal was to be pursued. But what does this mean regarding the existing federal EV credit ushered in by Trump’s predecessor, former President Joe Biden?

Trump Nixes Green New Deal, EV Tax Credit Supporting Tesla and Other Automakers Could Be in Jeopardy

As Ars Technica outlined, there are many concerns surrounding the EV industry raised by the introduction of Trump’s executive order: namely, the future of the EV tax credit. That credit currently affords up to $7,500 for the purchase of a new electric vehicle (should it qualify under the tax credit’s standards) and up to $4,000 for a used EV.

Section 2e of the executive order in question reads:

“[It is the policy of the United States] to eliminate the ‘electric vehicle (EV) mandate’ and promote true consumer choice, which is essential for economic growth and innovation, by removing regulatory barriers to motor vehicle access; by ensuring a level regulatory playing field for consumer choice in vehicles; by terminating, where appropriate, state emissions waivers that function to limit sales of gasoline-powered automobiles; and by considering the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies and effectively mandate their purchase by individuals, private businesses, and government entities alike by rendering other types of vehicles unaffordable.”

The tail end of the above text seems to directly target Biden’s EV credit, but in sum, it appears that the federal backing apparatus behind EV infrastructure will be greatly curtailed. Furthermore, the mention of state emissions waivers seems to target California and 17 other states that follow the California Air Resources Board’s (CARB) Zero Emissions Vehicles regulations, per Ars Technica.

Trump has gone head-to-head over CARB’s waiver in the past, gaining partial victories until the Environmental Protection Agency stepped in to grant California further waivers just last month.

Tesla Stock Ticks Upward, Then Dives in Turbulent Trading Day

Although Tesla stock rose slightly in early morning trading on Jan. 21, as MarketWatch reported, largely on the back of a presumed bump in CEO Elon Musk’s fortunes as a staunch Trump ally, the stock did fall below its opening price as trading progressed.

As of 2.44 p.m. ET, Tesla stock had fallen by 1.73%, resting at a price of $419.05.

As Barron’s underscored, the Trump administration’s potential plans to reignite a battle over CARB could prove costly for Tesla — and for EV automakers as a whole.

“A federal challenge to CARB could have a big impact on Tesla. CARB standards are the source of a significant portion of Tesla’s zero-emission vehicle credits, which it receives for producing more than its shares of ZEVs. Sales of the credits have generated almost $10 billion in sales for Tesla since the end of 2018. That is roughly 25% of the $36 billion in operating profit Tesla has reported in the same span,” Barron’s reported.