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Tesla’s next step of dominance comes from Trump EV tax credit policy: Wedbush

Credit: Tesla

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The loss of the $7,500 electric vehicle tax credit could be the key to Tesla’s next step of dominance, and as it has already been the holder of a vast majority of the market share of EVs in the U.S., its lead could get larger.

Rumors that the EV tax credit would disappear under the Trump adminsitration were circulating through the media before he was even elected to his second term. However, nobody is totally surprised that Trump, who was critical of President Biden’s EV policy, would get rid of the government incentive.

Yesterday, Reuters said in an exclusive report that sources close to the Trump administration are already planning to get rid of the $7,500 tax credit on new EVs, a move that will impact both the consumer and large companies.

Trump White House plans to ‘kill’ EV tax credit: report

However, Wedbush analyst Dan Ives believes the lack of a tax credit will actually benefit Tesla rather than hurt it. Other companies do not have the same luxury, the analyst says, but Tesla is in a position where it can lose the tax credit and still maintain sales because of its lower price point.

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Other companies might not have the same luxury. While GM and Ford have been able to bring the costs of their EVs down, they have not been able to bring a product that truly impacts Tesla from a singular standpoint. Their pulling of market share from Elon Musk’s company comes because there are so many competitors on the market now that they are all chipping away at what is a group vs. individual race.

The lack of a tax credit will also benefit Tesla as it will make competing EVs less attractive from a pricing standpoint, Ives writes in a note to investors:

“In line with our thoughts over the past few weeks Tesla has a scale and scope that is unmatched and while losing the EV tax credit could also hurt some demand on the margins in the US, this will enable Tesla to further fend off competition from Detroit as pricing/scale/scope is an apples to oranges when compared to the rest of the auto industry once the EV tax credit disappears.”

Wedbush is more concerned with what Detroit-based legacy automakers will do now that the credit is in jeopardy. There are also startups like Rivian who will feel the impact of this program being eliminated:

“This EV tax credit removal could clearly slow down Detroit’s shift to EVs over the next few years but we continue to believe GM is well positioned on both its ICE vehicles as well as its EV lineup. Rivian has continued to battle supply chain headwinds and while the EV tax credit removal would be a negative for its business, overall given the high price of its core vehicles we do not see this moving the needle significantly on the demand front.”

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The removal of the tax credit’s impact on each specific company might be something we have to wait for to see the true weight of, but it is no secret that it will certainly make consumer decisions more difficult. For many, the tax credit is the difference between being able to afford a car and sticking with the ride you have.

With Musk’s newfound influence in the White House thanks to a new role with Trump, perhaps the EV sector will see a new incentive program that will still keep companies alive while also benefitting consumers.

Need accessories for your Tesla? Check out the Teslarati Marketplace:

Please email me with questions and comments at joey@teslarati.com. I’d love to chat! You can also reach me on Twitter @KlenderJoey, or if you have news tips, you can email us at tips@teslarati.com.

Joey has been a journalist covering electric mobility at TESLARATI since August 2019. In his spare time, Joey is playing golf, watching MMA, or cheering on any of his favorite sports teams, including the Baltimore Ravens and Orioles, Miami Heat, Washington Capitals, and Penn State Nittany Lions. You can get in touch with joey at joey@teslarati.com. He is also on X @KlenderJoey. If you're looking for great Tesla accessories, check out shop.teslarati.com

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Tesla called ‘biggest meme stock we’ve ever seen’ by Yale associate dean

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Credit: Tesla

Tesla (NASDAQ: TSLA) is being called “the biggest meme stock we’ve ever seen” by Yale School of Management Senior Associate Dean Jeff Sonnenfeld, who made the comments in a recent interview with CNBC.

Sonnenfeld’s comments echo those of many of the company’s skeptics, who argue that its price-to-earnings ratio is far too high when compared to other companies also in the tech industry. Tesla is often compared to companies like Apple, Nvidia, and Microsoft when these types of discussions come up.

Fundamentally, yes, Tesla does trade at a P/E level that is significantly above that of any comparable company.

However, it is worth mentioning that Tesla is not traded like a typical company, either.

Here’s what Sonnenfeld said regarding Tesla:

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“This is the biggest meme stock we’ve ever seen. Even at its peak, Amazon was nowhere near this level. The PE on this, well above 200, is just crazy. When you’ve got stocks like Nvidia, the price-earnings ratio is around 25 or 30, and Apple is maybe 35 or 36, Microsoft around the same. I mean, this is way out of line to be at a 220 PE. It’s crazy, and they’ve, I think, put a little too much emphasis on the magic wand of Musk.”

Many analysts have admitted in the past that they believe Tesla is an untraditional stock in the sense that many analysts trade it based on narrative and not fundamentals. Ryan Brinkman of J.P. Morgan once said:

“Tesla shares continue to strike us as having become completely divorced from the fundamentals.”

Dan Nathan, another notorious skeptic of Tesla shares, recently turned bullish on the stock because of “technicals and sentiment.” He said just last week:

“I think from a trading perspective, it looks very interesting.”

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Nathan said Tesla shares show signs of strength moving forward, including holding its 200-day moving average and holding against current resistance levels.

Sonnenfeld’s synopsis of Tesla shares points out that there might be “a little too much emphasis on the magic wand of Musk.”

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

This could refer to different things: perhaps his recent $1 billion stock buy, which sent the stock skyrocketing, or the fact that many Tesla investors are fans and owners who do not buy and sell on numbers, but rather on news that Musk might report himself.

Tesla is trading around $423.76 at the time of publication, as of 3:25 p.m. on the East Coast.

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Elon Musk affirms Tesla commitment and grueling work schedule: “Daddy is very much home”

The remarks came as Tesla shares crossed the $400 mark on the stock market.

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Tesla CEO Elon Musk reiterated his commitment to the electric vehicle maker and its future projects this week, responding to speculation following his $1 billion purchase of TSLA stock. 

The remarks came as Tesla shares crossed the $400 mark on the stock market, extending a rally fueled in part by Musk’s TSLA purchase.

Elon Musk’s nonstop work schedule

Amidst the reaction of TSLA stock to Musk’s $1 billion investment, Tesla owners such as @greggertruck noted that “Daddy’s home.” Musk replied, stating that “Daddy is very much home.” He then shared details of a packed weekend of work, which was definitely grueling but completely within character for a “wartime CEO.”

Musk did note, however, that he had lunch with his kids during the weekend despite his extremely busy schedule.

“Daddy is very much home. Am burning the midnight oil with Optimus engineering on Friday night, then redeye overnight to Austin arriving 5am, wake up to have lunch with my kids and then spend all Saturday afternoon in deep technical reviews for the Tesla AI5 chip design. 

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“Fly to Colossus II on Monday to walk the whole datacenter floor, review transformers and power production (excellent progress), depart midnight. Then up to 12 hours of back-to-back meetings across all Tesla departments, but with a particular focus on AI/Autopilot, Optimus production plans, and vehicle production/delivery,” Musk wrote in his post

Wartime CEO

Wedbush analyst Dan Ives described Musk as operating in “wartime CEO mode,” highlighting autonomous driving and AI as a trillion-dollar market opportunity for Tesla. Musk reiterated this point late last month as well, when he outlined the several projects he is juggling among his numerous companies. At the time, Musk stated that he was busy with Starship 10, Grok 5, and Tesla V14. This was despite his notable presence on X. 

With Tesla Master Plan Part IV being partly released, the company is entering what could very well be its most ambitious stage to date. To usher in an era of sustainable abundance, Tesla would definitely require a “wartime CEO,” someone who could remain locked in and determined to push through any obstacles to ensure that the company achieves its goals.

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Tesla analyst says Musk stock buy should send this signal to investors

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish.”

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(Credit: Tesla)

Tesla CEO Elon Musk purchased roughly $1 billion in Tesla shares on Friday, and analysts are now breaking down the move as the stock is headed upward.

One of them is William Blair analyst Jed Dorsheimer, who said in a new note to investors on Monday that Musk’s move should send a signal of confidence to stock buyers, especially considering the company’s numerous catalysts that currently exist.

Elon Musk just bought $1 billion in Tesla stock, his biggest purchase ever

Dorsheimer said in the note:

“With Musk’s (Tesla stock) purchase, combined with the upward momentum for delivery expectations and robotaxi rollout, we are becoming more bullish. This purchase is Musk’s first buy since 2020. To us, this sends a strong signal of confidence in the most important part of Tesla’s future business, robotaxi.”

Musk putting an additional $1 billion back into the company in the form of more stock ownership is obviously a huge vote of confidence.

He knows more than anyone about the progress Tesla has made and is making on the Robotaxi platform, as well as the company’s ongoing efforts to solve vehicle autonomy. If he’s buying stock, it is more than likely a good sign.

Tesla has continued to expand its Robotaxi platform in a number of ways. The project has gotten bigger in terms of service area, vehicle fleet, and testing population. Tesla has also recently received a permit to test in Nevada, unlocking the potential to expand into a brand-new state for the company.

In the note, Dorsheimer also touched on Musk’s recent pay package, revealing that William Blair recently met with Tesla’s Board of Directors, who gave the firm some more color on the situation:

“We recently participated in a meeting with Tesla’s board of directors to discuss the details of Musk’s performance package. The board is confident of its position in the Delaware case and anticipates a verdict by end of year. It does not expect a similar situation to occur under new Texas jurisdiction. Musk has the board’s full support, and we expect he’ll get more than enough shareholder support for this to pass with flying colors.”

Tesla stock is up over 6 percent so far today, trading at $421.50 at the time of publication.

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