Tesla Could See 40% Of Its Profits Evaporate When Trump Takes Office, Jpmorgan Says

nnaughton@insider.com (Nora Naughton), Business Insider
Fri, 01/03/2025 - 9:42am

Elon Musk threw his support behind Donald Trump's reelection campaign.Getty ImagesTesla's disappointing sales could be a wake-up call for investors.JPMorgan estimated that Trump's proposed cuts to EV subsidies could cost Tesla $3.2 billion.Musk's car company benefits from existing emissions regulations.Tesla is poised for a tough year under the second Trump administration, despite CEO Elon Musk's friendship with the president-elect.Following disappointing fourth-quarter sales results and a 6% dip in Tesla shares on Thursday, JPMorgan said more trouble could be ahead.The bank's analysts estimated that, based on Trump's proposals to remove EV tax credits and subsidies that help make Teslas more affordable, about 40% of Tesla's profits would be in danger after Trump takes office.Musk's car company is already seeing a slowdown in demand — on Thursday it reported a drop in annual vehicle sales for the first time."Tesla does not appear to us on track to dominate the global auto industry amidst the electrification transition, which we view as only the starting point for present valuation," the analyst Ryan Brinkman wrote in a note to clients on Friday morning.Tesla said it sold about 1.79 million cars in 2024, down slightly from a record 1.8 million sales in 2023 and its first year-over-year decrease since becoming a major player.

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