Musk Says “Take Away Subsidies” As EV Price-War Enters Final Chapter With Trump Win

The final chapter of the electric vehicle price war ignited by Tesla’s Elon Musk could hinge on the outcome of the November elections, especially if former President Trump wins.

Trump has expressed no issues with EVs and recently stated, “I will end the Electric Vehicle Mandate on Day One — thereby saving the US auto industry from complete obliteration, and saving US customers thousands of dollars per car.” 

Translation: The former president states that all federal EV subsidies will end if he wins in November. 

But why would Musk support a complete reversal in the federal government’s policy on EV subsidies if Tesla relied so heavily on the EV credits to stoke demand? Unless Tesla is at the point where it no longer needs the taxpayer-funded gravy train. 

Last week, X user Whole Mars Catalog wrote on X:

“Tesla doesn’t need subsidies. The other unprofitable EV makers do. We are giving $7,500 to people who buy GAS cars with a small battery. We are capping the price of EVs, hurting the profitability of the industry. If the EV tax credit dies I won’t shed a tear for it.”

Musk responded: “Take away the subsidies. It will only help Tesla. Also, remove subsidies from all industries!” 

Take away the subsidies. It will only help Tesla.

Also, remove subsidies from all industries!

— Elon Musk (@elonmusk) July 16, 2024

In 2023, Tesla accounted for 55% of total US EV sales. As the dominant player in the market, Adam Jonas at Morgan Stanley noted earlier this year that consolidation was coming to weaker EV rivals of Tesla. 

Musk’s key to winning the EV price war appears to hinge on supporting Trump, whose position on cutting EV subsidies would only crush the competition, whether small EV startups or legacy OEMs. This means Tesla will easily defend its market share and remain dominant.  

In recent weeks, it has only become evident that Musk and Trump have held discussions behind the scenes. After all, Musk endorsed Trump following the attempted assassination of the former president last week by committing $45 million a month to a pro-Trump super PAC. 

Last month, Trump told the audience at a rally that Musk is “great” and “brilliant guy.” He even said, “I’m a big fan of electric cars.” 

“I like him, and I think a lot of people are going to want to buy electric cars but…if you want to buy a different type of car you have to have a choice—some people need to go far,” Trump said. 

Donald Trump last night on EVs and Elon Musk: “I’m a big fan of electric cars. I’m a big fan of Elon Musk. I like Elon. And I think a lot of people are going to want to buy electric cars, but if you want to buy a different type of car you have to have a choice.” pic.twitter.com/WDXoXhAEON

— Sawyer Merritt (@SawyerMerritt) June 7, 2024

Musk’s strategy to win the EV price war: Build the largest EV business with taxpayer dollars, popularize EVs, allow other startups and OEMs to enter the market, and then support politicians who want to end EV subsidies, crushing the competition and leaving Tesla reigning supreme.