How Elon Musk’s Trump support could hurt — or help — Tesla

Elon Musk has become, in some people’s words, President Donald Trump’s ‘first buddy.’ But the Trump administration’s moves to strip away a lot of EV-friendly policies have led some Tesla investors, analysts, and EV researchers to insist this will all be disastrous for the company, the largest U.S. EV maker by far.

More bullish analysts say otherwise: That Musk’s White House presence could be a boon for Tesla, whose future lies in autonomous driving and robotics.

“The story for Tesla going forward is autonomous and robotics, and we’ve never viewed Tesla as an automobile company,” said Wedbush senior analyst Dan Ives.

Having Trump in office, “massively changes the regulatory environment for autonomous vehicles,” he added.

“I think that you actually have a federal roadmap that will be created, which speaks to our view that the bet for the ages was Musk’s bet on Trump,” he said.

More bearish analysts and investors aren’t so sure.

Gerber Kawasaki CEO Ross Gerber is one of them. Gerber told CNBC his firm holds about 280,000 shares of Tesla, which is just over half of what he had at the stock’s highest point.

“I don’t see where Tesla goes from here, because the fact is autonomy doesn’t work — still doesn’t work,” Gerber said. “I literally take my Cybertruck. I can’t drive five minutes without having to disengage. And then the Waymos are just like driving around me like crazy. And I’m like, we’re just not there. And I don’t think the hardware is going to get us there and people aren’t buying the vehicles.”

People aren’t buying the vehicles, in Gerber’s opinion, because of Musk’s Trump support and his activity in the White House.

“Elon is probably the most hated person in the world,” he said. “Most people around the world, you know, hate Elon. And the way they’re taking it out is on Tesla. And it’s a really unfortunate thing.”

Data shows Tesla sales have fallen in several European countries — by as much as 60% in Germany in the first two months of 2025 over the same period the previous year.

Meanwhile, the Trump administration is taking aim at policies that have helped EV makers like Tesla. The administration issued an executive order on January 20 looking at “the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs”.

At least one variant of every model that Tesla sells is eligible for the federal credit, more than any other automaker.

“If President Trump gets rid of the $7,500 credit, every single Tesla car just increased by $7,500,” said GLJ Research’s Gordon Johnson. “It doesn’t matter how you spin it. That is a huge negative, given, I think, 60% of America can’t afford an unexpected $600 bill.”

Tesla has made billions by selling government-mandated credits to other automakers.

At both the federal and state levels, government rules mandate that automakers sell a certain percentage of low-emission or zero-emission vehicles. If they can’t meet the quotas, they have to buy credits from another automaker that does. Since Tesla makes only EVs, it has made a lot of what Gerber calls “free money” selling these credits to other legacy automakers. Tesla pulled in more than $2.7 billion alone from these credits in 2024. Though it is a small share of Tesla’s $97.7 billion revenue that year, Johnson said much of Tesla’s free cash flow is from these credits.

“Our analysis suggests over the life of Tesla, if you take out these EV credits their free cash flow is actually negative,” Johnson said.

Trump’s January order also requested a government pause on the disbursement of funds for electric vehicle charging.

Tesla has received about $31 million from the National Electric Vehicle Infrastructure program, a Biden-era federal program to fund the buildout of charging facilities around the U.S. Tesla got about 6% of all the program’s funds.

Bulls argue the disappearance of the EV tax credits, regulatory credits, and even charging funds, either won’t substantially hurt, or will even help, Tesla by knocking out competitors that don’t have the scale to build EV’s profitably.

“Tesla is the only one making money,” said Stifel Managing Director Stephen Gengaro. “They can afford to incentivize sales and cut costs.”