Trump wants to repeal the tax break for electric cars implemented by Biden. Ilon Musk doesn't mind

US President-elect Donald Trump's transition team plans to repeal the federal tax credit for the purchase of electric vehicles, which is currently worth $7,500. This tax credit is the centrepiece of the Inflation Reduction Act (IRA).

Here's What We Know

As Reuters reported, citing two independent sources, the cancellation of the electric car exemption is strongly supported by oil tycoon and fossil energy advocate Harold Hamm, who heads Trump's energy team, as well as North Dakota Governor Doug Burgum. The initiative is causing concern in the US auto industry, as the federal rebate has become an important factor for many automakers in the battle for electric vehicle market share.

Trump's likely rollback of the Biden administration's clean energy initiatives was expected. What is surprising, however, is Tesla's stance. According to CEO Ilon Musk, his company will see only a small drop in sales, with the brunt of the blow being taken by "traditional automakers" such as Ford Motor and General Motors, which are just beginning to aggressively develop their electric vehicle lines.

The Alliance for Automotive Innovation, an automotive association whose members include major manufacturers with the exception of Tesla, recently urged Congress to keep the tax credit in place. The association argues that the incentive is necessary to strengthen U.S. leadership in automotive technology.

Source: Reuters