24/7 Wall St. Key Points:

• Trump may be boosting Tesla Inc. (NASDAQ: TSLA) by driving less competitive automakers out of the market with proposals to reverse EV initiatives.
• General Motors Co. (NYSE: GM) giving up on its self-driving Cruise initiative highlights more general industry challenges with EV and autonomous car profitability among growing costs, delays, and regulatory hurdles.
• While EV stocks are on shaky footing, The Next Nvidia stocks are soaring. Learn more about the next AI stocks that could go parabolic in 2025.

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Transcript:

[00:00:00] Lee Jackson: How about electric vehicles? And I’ll start with President Trump is putting the entire post office service. Electric vehicle

[00:00:12] Douglas McIntyre: Order start it up. Let’s go.

[00:00:15] Lee Jackson: You know, the thing that we’ve talked about over and over is at one point, do electric vehicles truly dominate and Musk thinks that 40, 50 years from now, everybody’s driving nothing but an electric vehicle, and he could very well be right if they get a battery that’s not the size of the car. But one thing I thought was very interesting is we know that A lot of the green mandates that were put in place by the Biden administration are going to be gone in about 35 days because President Trump has already said, or President elect Trump has already said that this big, big mandate in order to electrify like 16,000 vehicles for the post office, canceled, done, over.

[00:01:01] Lee Jackson: He’s not going to do it. And I think that the whole EV growth in terms of making it an everyday affair is, is going to take, it takes a lot longer than expected. And look at what it’s, it’s, and in a sidebar, look at GM, they threw in the towel on, on, on cruise. They finally, after all the money, after 10 billion they put into it, you know, they lit on fire 10 billion and now they’re just gonna kind of merge it back into the corporation.

[00:01:30] Lee Jackson: So, there’s a lot of change coming in EV land

[00:01:35] Douglas McIntyre: Right. So you have this post office cancellation, which, is interesting because there was such it was such a huge initiative for the for the postal service

[00:01:47] Lee Jackson: right?

[00:01:47] Douglas McIntyre: and then you have again, this is one of those things where what’s the theory? The Trump administration will probably eliminate the tax credit for EVs.

[00:01:57] Douglas McIntyre: In some cases there isn’t a tax credit on EVs if enough of the components come from China. They’re assembled outside North America. In some cases it’s 3750 depending on the mix of batteries and assembly. And if enough of the parts batteries assembly are done in North America, then it’s a $7,500 credit.

[00:02:19] Lee Jackson: Correct.

[00:02:20] Douglas McIntyre: If that goes away, the theory is is that it hurts everybody. But the second theory is is that it hurt it. It helps Elon Musk because it pushes all the other EV companies that are losing money on every car, it pushes them out of the business. basically makes it much harder for them to sell EVs and it’s painful for him initially. Tesla takes, you know, maybe a year of pain, but that their market share skyrockets because the, the rest of the people who are in the EV business just can’t, can’t take it when the incentive to buy these things goes away. So that’s the, the contrarian theory is, is that this is awesome for Tesla, Tesla, the tax credit going away,

[00:03:06] Lee Jackson: Well, I think it is. And again, because of his production capability and, you know, the scale and margin that he can operate at, he’s going to come up with the $20,000 or $25,000 car sooner rather than later. And it’ll be smaller, but it’ll look cool. because most of the teslas look pretty cool. And yeah, I mean, he’s going to dominate that.

[00:03:30] Lee Jackson: And you know, another thing from the government, remember they wanted to take the entire fleet of government automobiles and convert those to EV. That doesn’t happen. That doesn’t happen.

[00:03:41] Douglas McIntyre: Not going to happen.

[00:03:43] Lee Jackson: Nope.

[00:03:43] Douglas McIntyre: I think it’s also a sign of the fact that there’s a lot of support for the fossil fuel industry in the new administration. And, you know, if you look at the trend here, they want to regulate as few things as possible. And in some ways, giving people tax credits on anything, it’s a form of regulation.

[00:04:03] Douglas McIntyre: It’s a, it’s a negative regulation. You know, you’re

[00:04:06] Lee Jackson: Right.

[00:04:07] Douglas McIntyre: I’m going to, I’m going to sort of backdoor regulate you by, by getting you not to buy gas powered cars because I’m going to give you this credit. So it’s a, it’s an odd way to use the tax system to get people to do what you want a direction that wasn’t intended.

[00:04:25] Lee Jackson: Yeah. And, and I think a lot with the doge, cost efficiency, you know, cutting, cutting and burning of spending, which they have to do, you know, everybody’s like, oh, they’re going to have to hit this and hit them. They’re going to have to do what they have to do because we can’t sustain. Another eight, 10, 15 trillion on top of a $36 trillion deficit, where the sheer cost on our debt coverage is more than the military budget. So yeah, it, everything that’s green, that was in those green pack packages is gonna get cut. All of it.

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