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Investment veteran Gary Black cautions that Tesla Inc (NASDAQ:TSLA) will lose the most if the $7,500 federal electric vehicle tax credit is eliminated, citing the company’s overwhelming dependence on EV sales compared to traditional automakers.
What Happened: Black, managing partner at The Future Fund LLC, points to Tesla’s recent history of price-related challenges as evidence for his concern. “Tesla’s earnings power declined by 45% and shares fell by 70% in 15 months” following price cuts of 15-20% in late 2022 and 2023, he noted on social media platform X.
The potential loss of the tax credit could effectively increase Tesla’s U.S. vehicle prices by 20%, affecting approximately 30% of the company’s global sales volume. Black emphasizes that Tesla’s vulnerability stems from its business model, where electric vehicles represent about 80% of revenue.
“No one else has anywhere near that degree of exposure to EVs,” Black wrote, contrasting Tesla’s position with traditional automakers. He dismisses concerns about the impact on ...
