At his confirmation hearing, President-elect Trump’s Transportation Secretary nominee, Sean Duffy, emphasized that EV drivers should contribute to road maintenance through usage fees. This raises concerns for companies like Tesla (TSLA), as additional fees could make EV ownership less appealing and potentially slow down demand. With California set to phase out ICE vehicles, the state expects to lose $5 billion in gas tax revenue over the next decade, which makes EV-related taxes a growing focus for policymakers.
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The decline in gas tax revenue has prompted states to seek new ways to close the funding gap. Some states charge EV owners higher registration fees, while others tax electricity at public charging stations, although this doesn’t cover home charging, which accounts for 80% of EV usage. In addition, Hawaii will implement a per-mile road usage charge in 2025, but similar proposals failed in New Hampshire and Minnesota. This demonstrates that the support for such measures is currently mixed.
For Tesla, these new fees could impact consumer sentiment as states like Maryland, New Jersey, and Pennsylvania introduce additional EV registration charges. While Tesla’s affordability and innovation have boosted EV adoption, an increase in fees tied to road use may pose challenges to its growth since electric vehicles generally tend to be more expensive than traditional ones.
Is Tesla Stock a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on TSLA stock based on 13 Buys, 12 Holds, and nine Sells assigned in the past three months, as indicated by the graphic below. After a 93% rally in its share price over the past year, the average Tesla price target of $325.40 per share implies 23.2% downside risk.
