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Trump's broadside against electric cars comes as Tesla is pegged the biggest new EV subsidy beneficiary

The Model 3 could qualify for $7500 in subsidies (image: Tesla)
The Model 3 could qualify for $7500 in subsidies (image: Tesla)
A market research firm has identified Elon Musk's Tesla as the electric car company that will benefit the most from the Inflation Reduction Act's new EV subsidy scheme that will run until 2032. Former President Donald Trump's recent anti-EV rant, however, may put these subsidies in jeopardy if he runs again and wins.

Despite all the made-in-USA requirements that the recently passed Inflation Reduction Act places before electric car makers in order to grant them the US$7,500 subsidy per new EV sold, a reputed analyst predicts a surge in Tesla's share price riding on the government's largesse. One of the top auto industry analysts on Wall Street, Wolfe Research's Rod Lache, raised their Tesla stock rating to "Outperform" and set a new US$360 price target citing its top positioning as an Inflation Reduction Act subsidy beneficiary.

The Inflation Reduction Act stands out as far and away the most consequential development for the U.S. Auto Industry that we’ve seen in a very long time. We believe that it has potential to affect the entire value chain -Significantly changing the trajectory of EV adoption, as well as the competitive landscape and earnings prospects for OEMs and Suppliers. We believe that this development is still far from fully appreciated...

In order to benefit from the subsidy scheme, critical materials that go into EV batteries as well as their assembly have to be sourced either locally or through a country the US has a fair trade agreement with for a carmaker to qualify. While currently the US produces a fraction of the cathode and anode components for lithium-ion batteries, some Tesla battery makers already started cleaning up their supply chain from China-sourced materials in order to help Elon Musk's company qualify for the subsidy windfall.

If former US President Donald Trump runs again and gets elected, however, the Inflation Reduction Act could be challenged in some form, especially in the part that deals with electric vehicle subsidies. Speaking at a rally in the town of Wilkes-Barre in Pennsylvania, President Trump entered into a tirade against electric cars as a viable alternative to gas-powered vehicles.

His feud with Elon Musk aside, the main argument was that the time spent on a charger could exceed the actual time spent driving, as well as the fact that EVs are currently way more expensive than legacy vehicles on average. He finished an anecdote about a friend who purportedly spent more time on the charger than driving from Kentucky to D.C., with the claim that they asked him to "please let’s get rid of this stuff," referring to electric vehicles as a whole.

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CNBC, Aaron Rupar (Twitter)

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> Expert Reviews and News on Laptops, Smartphones and Tech Innovations > News > News Archive > Newsarchive 2022 09 > Trump's broadside against electric cars comes as Tesla is pegged the biggest new EV subsidy beneficiary
Daniel Zlatev, 2022-09- 6 (Update: 2022-09- 6)