President-elect Donald Trump has mulled ending the US$7,500 federal tax credit for electric vehicles (EVs), a move Tesla and its CEO Elon Musk endorse. Musk stated in July, “Take away the subsidies, it will only help Tesla,” on his social media platform, X.

The credit, designed to promote EV adoption, has benefited automakers struggling to compete with Tesla. While legacy manufacturers like Ford and General Motors lose money on EV sales, Tesla remains the only U.S. automaker profiting from its EVs.

Ending the tax credit could lead to lower EV prices across the market, potentially narrowing Tesla’s margins but forcing competitors to scale back production to avoid losses. This would limit EV options for consumers, further benefiting Tesla.

Industry groups, including the Alliance for Automotive Innovation, oppose the move, citing risks to American jobs and competition with Chinese automakers. Analysts agreed that Tesla would gain a stronger market position while rivals would face intensified challenges without credit.