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Elon Musk has recently been characterized as President Donald Trump’s ‘first buddy,’ a designation that raises questions about the future of electric vehicle (EV) policies under the Trump administration. While some Tesla investors and analysts express concern that the administration’s efforts to roll back favorable EV policies could jeopardize the company, which remains the largest EV manufacturer in the United States, others see potential advantages.
Advocates of Tesla’s growth contend that Musk’s close association with the White House could ultimately benefit the company, especially as it pivots towards autonomous driving and robotics. Dan Ives, a senior analyst at Wedbush, posits that the evolving regulatory landscape under Trump could facilitate the advancement of these technologies. “The narrative surrounding Tesla is not merely about cars but rather about autonomy and robotics,” Ives suggests. “The advent of Trump in office fundamentally alters the regulatory game for autonomous vehicles, paving the way for Musk’s vision.”
Conversely, some analysts remain skeptical. Ross Gerber, CEO of Gerber Kawasaki, voiced his doubts in a recent CNBC interview, citing challenges Tesla faces with autonomy technology. Gerber disclosed that his firm holds around 280,000 shares of Tesla, a significant decrease from their peak position. “The reality is that autonomy is still unproven,” he stated. “I find myself having to disengage my Cybertruck frequently, while competitors like Waymo operate seamlessly. We aren’t there yet, and I have serious reservations about whether the hardware can achieve the needed advancements.”
In Gerber’s view, public sentiment toward Musk and his political affiliations may be impacting Tesla’s sales. “Elon is likely one of the most disliked figures globally, and this negative perception is reflected in Tesla’s market performance,” he remarked.
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Recent data indicates a decline in Tesla sales across various European markets, including a staggering 60% drop in Germany during the initial months of 2025 compared to the same period in 2024. This downturn coincides with the Trump administration’s recent executive order aimed at evaluating “the elimination of unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs.”
Currently, every model Tesla produces is eligible for federal tax credits, a significant advantage over other manufacturers. Gordon Johnson of GLJ Research warns that removing the $7,500 credit could push up Tesla’s prices by the same amount, creating a financial burden for many potential buyers, given that a large segment of the U.S. population struggles with even minor unexpected expenses.
Tesla has been lucrative as a result of selling government-mandated credits to other automakers, generating substantial revenue from this source. The company accrued over $2.7 billion from credit sales in 2024, although Johnson notes that this only represents a fraction of its overall revenue of $97.7 billion. He argues that without considering these EV credits, Tesla’s free cash flow would trend negatively over time.
Moreover, Trump’s executive order has included a request to halt funding for electric vehicle charging initiatives. Tesla has benefited from approximately $31 million from the National Electric Vehicle Infrastructure program, which was established under the Biden administration to expand charging infrastructure across the U.S.
Proponents of Tesla argue that the potential removal of tax credits, regulatory advantages, and funding for charging stations may not harm Tesla as significantly as anticipated. Some believe that it might even allow Tesla to outlast competitors lacking the resources to weather such a market shift. “Tesla is currently the only automaker turning a profit in this sector,” points out Stephen Gengaro, Managing Director at Stifel. “The company is well-positioned to incentivize sales and manage costs effectively.”
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