5 Auto Stocks That Could Struggle If Trump Ends the EV Tax Credit
Written by
Tobi Opeyemi Amure
Edited by
Zuri Anderson
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The proposed elimination of the $7,500 federal electric vehicle (EV) tax credit under the Donald Trump administration represents a pivotal moment for the automotive industry.
Bloomberg states that analysts figured that removing the tax credit would reduce annual U.S. EV registration by 317,000 units. Some automakers face higher risks given their dependence on subsidies, being in a competitive position, and strategic investment in electrification.
Here are five auto stocks that could suffer from the EV tax credit being repealed, based on what’s happened recently, financial data and industry trends.
1. Rivian Automotive (RIVN)
In particular, the electric truck manufacturer Rivian is especially at risk of losing the EV tax credit.
Revenue from the $7,500 credit has helped the company offset the high price of the R1T truck and R1S SUV. Rivian’s vehicles, priced at around $70,000 before subsidies, would be particularly sensitive to price as the cost remains a barrier to market adoption.
As if this risk were not bad enough, it also compounds the automaker’s financial position. Rivian announced it lost $5.4 billion last year and is running out of cash during a period of scaling up production. After initial reports that the credit could be repealed, and that could unravel promising demand for Rivian’s electric vehicles, Quartz reported that Rivian’s stock fell 6%.
2. Lucid Group (LCID)
Lucid Motors, a luxury EV manufacturer, faces existential threats from the tax credit’s elimination. Its Air sedan kicks off at $71,400, solidifying it as a luxury car filled with affluent buyers.
But even high income consumers are sensitive to price changes. The car’s base price of around $10,000 more is equivalent to at least 10% more with the $7,500 credit knocked off.
The risks are exacerbated by Lucid’s operational challenges. In 2024, Lucid made 9,029 vehicles, up from 8,428 in 2023, but is still unprofitable registering a net loss of $2.7 billion in 2024, Electrive reported. Lucid’s stock fell 5% after Trump’s election amid a broad sector slide showing a lack of investor confidence in the subsidy-free viability.
But there’s nothing for Lucid to fall back on, providing it lacks any hybrid or internal combustion engine (ICE) offerings, if policy shifts continue.
3. Ford Motor Company (F)
Ford’s $22 billion electrification plan focuses on models like the F-150 Lightning and Mustang Mach-E. The cost difference between electric vehicles and internal combustion engine vehicles are covered partly by tax credits.
According to Fox Business, the automaker has struggled to make EV production profitable yet, reporting a $5.1 billion loss in the Model e unit in 2024. Removing the subsidy would force Ford to swallow the $7,500 or raise prices and further volume declines.
Additionally, the strategic alignment is at risk of also falling to the policy shift. To qualify for IRA incentives, the company has secured battery sourcing at home and retooled factories for EV production. The tax credit is essential to Ford’s plan to invest $11.4 billion in Tennessee and Kentucky battery plants, or the timeline for when they break even could fall.
4. General Motors (GM)
General Motors is committed to electrification, aiming for 30 EV models by 2025 with a significant investment in its Ultium platform, according to American Machinist.
If the EV tax credit is eliminated, this could hurt GM’s profitability as well as its sales projections. Over $27 billion has been spent so far by GM on EV and autonomous tech up till 2025. According to Yahoo Finance, the idea of taking away the credit could cut U.S. EV sales by almost a quarter (27%).
Still, GM anticipates that EV operating losses will decline about $2 billion in 2025, per GMAuthority.Â
5. Stellantis (STLA)
Stellantis, the parent company of Jeep and Ram, faces unique vulnerabilities due to its late entry into the EV market.
Timing also coincides with potential tax credit expiration as the automaker plans to launch its first U.S.-built EVs, including the Ram 1500 REV and Jeep Recon, in 2025. Without subsidies, Stellantis’s premium-priced electric trucks and SUVs could struggle against established rivals like Ford and Rivian.
Automotive Logistics reports that Stellantis is investing in European EV production, such as battery production in Canada. Its U.S. models, however, may find themselves struggling with changes in the tax credits and tariffs.
Besides that, the company is dealing with tariffs on imports from Canada and Mexico, producing a higher price. Stellantis reported a 70% decline in net profit for 2024, attributed to industry challenges and underperformance in North America, as per CBT News.
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