Tesla is facing serious financial and operational challenges following former President Donald Trump’s newly proposed legislation, unofficially dubbed the “One Big Beautiful Bill Act.” The bill, if passed, could dramatically reshape the electric vehicle landscape—and Tesla may take the biggest hit.
Key Provisions in the Bill That Impact Tesla
1. End of EV Tax Credits:
One of the bill’s most critical changes is the proposed end to the federal $7,500 tax credit for new EV purchases after 2025. Tesla, which has long relied on these incentives to make its vehicles more affordable, could see a significant drop in demand. A potential 17% increase in effective prices for Tesla’s cars could turn away price-sensitive buyers.
2. Cut to Regulatory Credits:
Tesla currently makes billions by selling regulatory credits to traditional automakers who need to meet emission standards. In 2024 alone, these credits added $2.76 billion to Tesla’s revenue. If Trump’s bill phases out these credits, Tesla’s profit margins—already under pressure—could fall below industry averages.
3. Federal Contracts at Risk:
Trump has also hinted at cutting off federal contracts and subsidies to companies owned by Elon Musk, including Tesla and SpaceX. This puts at risk more than $3 billion in existing government deals, including major contracts with NASA and the Department of Defense.
4. Market Reactions Reflect Uncertainty:
The political tension between Trump and Musk has already rattled investors. Tesla’s stock plunged 14% recently, erasing over $150 billion in market value amid fears of regulatory and financial setbacks.
What This Means for Tesla
The bill poses a multi-pronged threat to Tesla’s revenue streams, customer affordability, and strategic government partnerships. It also marks a growing political rift between Trump and Musk—once allies—that could further shape Tesla’s future if Trump regains office.
