Trump transition team reportedly planning to roll back Biden EV, emissions policies
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From the hotly-debated high-flier Tesla (TSLA), Wall Street’s newest darling Rivian (RIVN), traditional-stalwarts turned EV-upstarts GM (GM) and Ford (F) to the numerous SPAC-deal makers that have come public in this red-hot space, The Fly has you covered with “Charged,” a weekly recap of the top stories and expert calls in the sector.
TOTAL GAME CHANGER:
Wedbush raised the firm’s price target on Tesla. The firm believes the Trump’s White House in the next four years will be a “total game changer” for the autonomous and artificial intelligence story for Tesla. The firm estimates Tesla’s AI and autonomous opportunity is worth “at least” $1 trillion alone and fully expects that under a Trump White House, “these key initiatives will now get fast tracked as the federal regulatory spiderweb” the company has encountered over the past few years “clears significantly.” Tesla could reach a $2 trillion market cap by the end of 2025 as the company’s autonomous vision starts to take shape along with “very solid” delivery demand from the China market, Wedbush tells investors in a research note. The firm says its price target “conservatively assumes no value today” for Optimus, which could be a “major upside catalyst” for the Tesla story over the coming years.
CAR-CRASH REPORTING:
The Trump transition team wants the incoming administration to drop a car-crash reporting requirement opposed by Elon Musk’s Tesla, a move that could cripple the government’s ability to investigate and regulate the safety of vehicles with automated-driving systems, Reuters’ Jarrett Renshaw, Rachael Levy and Chris Kirkham report, citing a document seen by the publication. Removing the crash-disclosure provision would particularly benefit Tesla, which has reported most of the crashes – more than 1,500 – to federal safety regulators under the program, the authors note.
ROLL BACK EV, EMISSIONS POLICIES:
Incoming U.S. President Donald Trump’s transition team is recommending sweeping changes to cut off support for electric vehicles and charging stations and to strengthen measures blocking cars, components and battery materials from China, Reuters’ Jarrett Renshaw and Chris Kirkham report, citing a document seen by publication. The recommendations come as the U.S. EV transition stalls and China’s heavily subsidized EV industry continues to surge, in part because of its superior battery supply chain. The team also calls for eliminating the Biden administration’s $7,500 tax credit for consumer EV purchases, the authors say. The policies could strike a blow to U.S. EV sales and production at a time when many legacy automakers, including General Motors. Cutting government EV support could also hurt sales of Elon Musk’s Tesla, the dominant U.S. EV seller. Other publicly traded companies in the space include Rivian, Lucid (LCID), Nio (NIO), Xpeng (XPEV), Li Auto (LI), Nikola (NKLA), and Zeekr (ZK).
TARGET CHANGES:
Goldman Sachs raised the firm’s price target on Tesla. Given a reduced EV market forecast, the firm is lowering its EPS estimates for Tesla, driven by lower deliveries and lower auto gross margins. However, while Goldman sees fundamental headwinds to the core auto business over the near to medium term, it also believes the market is taking “a more forward-looking approach to Tesla,” including with respect to its AI opportunity.
Meanwhile, Cantor Fitzgerald raised the firm’s price target on Tesla. The firm has “become more bullish” on Tesla’s Robotaxi and self-driving opportunities. However, it remains neutral on the shares due to valuation and awaits a better entry point. Cantor is becoming more bullish on Tesla’s Robotaxi segment, following President-elect Trump’s plans to potentially develop a federal framework for self-driving vehicles in the United States, and an update to the company’s full self-driving software. The firm says that if the framework is established by the Transportation Department, Tesla will be a major beneficiary. In addition, the company has released an update to its autonomous software, which includes several enhancements such as reverse driving and auto-parking at the start and the end of journeys, says Cantor. It notes the feedback has been “quite positive” in its conversations, bringing Tesla closer to its Robotaxi launch. The firm increased its Robotaxi fleet size in fiscal 2027 and 2028 to 115,000 from 15,000 and to 300,000 from 10,000, respectively.
Morgan Stanley raised the firm’s price target on Tesla. With 2025 ushering in a new administration, the firm refreshes its 2025 auto forecasts, noting that policy changes present near-term headwinds to U.S. EV sales, but arguing that the U.S. “must not cede autonomous leadership to geopolitical rivals.” The firm, which sees U.S. sees a seasonally adjusted annualized rate of auto sales greater than 16M, supported by lower rates but higher competition, with tariff hikes as “an inflationary wild card,” prefers dealers to suppliers and reiterates Tesla as Top Pick in the automobiles group.
Click here to check out Tesla’s recent Media Buzz Sentiment as measured by TipRanks.
ON BLOOM SIDELINES:
Roth MKM initiated coverage of Bloom Energy (BE). Bloom is a global leader in the hydrogen fuel cell sector with its patented solid oxide technology platform, the firm tells investors in a research note. Roth favors Bloom’s position with established technology that it says can be rapidly deployed in markets that are increasingly grid-constrained, as well as its ability to effectuate energy transition with customers over time. However, it finds the stock’s risk/reward more balanced at current valuation levels and looks for potential pullbacks to get more constructive.
BUY BROOKFIELD RENEWABLE PARTNERS:
JPMorgan upgraded Brookfield Renewable Partners (BEP). The company’s leading access to capital positions it to accelerate investment in projects and its scale and diversification “provide a relative safe haven in the sector,” the firm tells investors in a research note. JPMorgan says demand for de-risked, operational assets from low cost capital organizations is strong, supporting Brookfield’s expectation that fiscal 2024 capital recycling will reach record levels.
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Originally Posted December 16, 2024 – Charged: Analyst bullish on Tesla as Trump ‘a total game changer’
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