The second Donald Trump presidency is here, and with it, the EV timeline just got shoved into the slow lane.
Trump wasted no time canceling Joe Biden’s 2021 executive order aimed at making half of all new US vehicle sales electric by 2030. Even if the policy is revived, hitting that goal could now take another decade.
Old skool car stocks threw a party while Rivian and Lucid took a beating, and were left waiting outside like rejected gatecrashers. Both EV stocks plunged more than 6% on Tuesday.
Ford, GM and Stellantis — which are still cranking out gas-powered rides — are loving this. Sure, they’ve dabbled in EVs, but they’re no Tesla or BYD.
Ending tax credits for EVs is the next natural step. This will just make things worse for everyone, starting from Tesla. Yup, Elon Musk’s bromance with Trump isn’t saving Tesla here.
Read more: Tesla is the donut… the rest are crumbs
Bargain deals
Legacy automakers are trading at dirt-cheap valuations — Ford and GM have forward P/E ratios of just 5x or 6x, a steal compared to Tesla’s sky-high 100x. Analysts see more upside, too.
Ford and GM are still expected to rise 9% and 11%, respectively, over the next 12 months according to analyst consensus, LSEG data shows. And analysts haven’t even started rewiring their estimates.
Deutsche Bank is bullish on GM, upgrading it to “buy” for its proven ability to navigate policy shifts and economic bumps.
It’s taking a more cautious stance on Ford with a “hold” rating.
Read more: Tesla’s the ultimate Trump-Musk bromance meter
Are EVs dead?
Not all pro-EV policies can be erased with a Trump executive order.
Some of the EV-friendly policies out there, including subsidies, may need more than just Trump’s word to be scratched off. Plus, Musk might still work his Trump bromance magic.
Autonomous driving could see more support under Trump 2.0, says Thomas Hohne-Sparborth of Lombard Odier. That could indirectly boost EV adoption, even if the administration’s motives aren’t exactly green.
And while Ford and GM might be celebrating now, sluggish revenue growth suggests they’ll need more than a few anti-EV orders to keep humming along.
So, ready to refuel your portfolios, or are you sticking with the EV crew?
Edited by Ankush Chibber. If you have any tips, ideas or feedback, please get in touch: talk-to-us@moniify.com
