EV shocker: Tesla, GM and Ford may all benefit if the EV tax credit is pulled

President-elect Donald Trump’s transition team is planning to push ahead with a plan to kill the $7,500 consumer tax credit for electric vehicle purchases, according to a Reuters reports.

Sources have said that representatives of Tesla (NASDAQ:TSLA) told a Trump-transition committee they support ending the subsidy. The EV juggernaut is seen benefiting from an end to the EV tax credit because of its mature position in the market. Earlier this year, CEO Elon Musk said eliminating the subsidy might slightly hurt Tesla sales, but would devastate the Austin-based company’s U.S. EV competitors.

The development was highly anticipated and may already be partially baked into the shares prices of major EV players. In afternoon trading on Thursday, decliners included Rivian Automotive (RIVN) -8.4%, Tesla (TSLA) -3.8%, and Lucid Group (LCID) -2.3%. Suppliers Mobileye Global (MBLY) -7.5%, and Notably, General Motor (NYSE:GM) and Ford Motor (NYSE:F) are both about 1% higher as investors eye the potential for better profitability if the Detroit giants pull back further on EV initiatives.

The survival of the EV tax credit could also have general implications for the iShares Self-Driving EV and Tech ETF (IDRV).