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The Detroit automakers’ shares are rising Tuesday while their fully-electric rivals saw their stocks fall as President Donald Trump began tearing into his predecessor’s pro-EV moves.
“We will end the Green New Deal, and we will revoke the electric-vehicle mandate, saving our auto industry and keeping my sacred pledge to our great American auto workers,” Trump said in his inaugural address. “You’ll be able to buy the car of your choice.”
Later on Monday, he issued an executive order to eliminate the “EV mandate, terminate state emissions rules that limit the sale of gasoline-powered cars, and consider eliminating any subsidies for EVs. There is no nationwide U.S. electric-vehicle mandate, but some states, led by California, have implemented their own rules to phase out fossil fuel-powered vehicles, while the Environmental Protection Agency has issued a rule limiting tailpipe emissions.
Trump also directed agencies to stop handing out funds tied to Former President Joe Biden’s Inflation Reduction Act and Infrastructure Investment and Jobs Act, which provided funding for EVs and other clean energy infrastructure. More than $82.5 billion has been allocated to 164 EV-related projects, creating 63,659 jobs, through the IRA, according to E2's investment tracker.
The president is also expected to scrap the IRA’s $7,500 tax credit for EV buyers, which has helped keep costs down and boost sales for automakers.
Electric truck maker Rivian’s (RIVN-6.65%) stock fell by more than 6%, while luxury EV maker Lucid’s (LCID-6.35%) shares dropped by more than 4%. Tesla (TSLA-0.55%), despite Elon Musk’s close relationship with Trump and a price target raise from Piper Sandler, fell almost 3%.
“Not sure how the math works for elimination of the EV credit to be bullish,” for Tesla, the Future Fund Managing Partner Gary Black wrote Monday. Black noted that Germany and France’s moves to end their EV tax credits contributed to Tesla’s sales volumes falling 41% and 34%, respectively, on an annual basis.
The stock may also be down because of Musk’s alignment with Trump, as well as reactions to a gesture he made while speaking at Trump’s inauguration parade on Monday. Tesla lost $15 billion in brand value in 2024, according to a new report, partially due to Musk’s political rhetoric and brash behavior.
The Detroit automakers will also be affected by Trump’s EV plans, but have their gas-powered and hybrid portfolios — which still account for most of their sales — to fall back on. Ford Motor Co. (F+2.31%) and Stellantis (STLA+2.52%) shares are up by almost 2% and more than 2%, respectively.
General Motors (GM+5.75%) shares gained almost 5% in trading Tuesday, partially boosted by an upgrade from a “hold” rating to “buy” from Deutsche Bank (DB+2.75%). Analysts led by Edison Yu say that GM’s recent moves to close down its Cruise self-driving unit and restructure its China business, along with its recent buybacks, give them confidence in the company.
“While there are concerns about the cycle and potential policies of the new Trump administration, our view is that these risks are already very well-known, and there’s room for positive surprises,” the analysts wrote on Tuesday. One such surprise could be Trump declining to follow through on his plans to slap Canadian and Mexican imports with tariffs, which would affect most automakers.