Shares of electric vehicle (EV) maker Tesla (TSLA) took a hit on Tuesday after President Donald Trump ended a pro-EV policy implemented by the Biden administration, which would have required that half of all new U.S. cars be electric by 2030. Unsurprisingly, Trump’s move is worrying EV manufacturers and their investors. In fact, other EV stocks also felt the impact, as shares of Lucid (LCID) and Rivian (RIVN) sank.
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However, shares of legacy automakers General Motors (GM) and Ford (F) saw gains, as this now makes their hybrid and gas-powered vehicles more competitive. In addition, Trump’s administration is now considering eliminating what it considers to be “unfair subsidies” and other incentives put in place by the previous administration that favor EVs.
Interestingly, though, Tesla CEO Elon Musk has said in the past that he is not worried about removing incentives because the impact on his company would be minimal and might even be beneficial in the long run. Indeed, Musk believes that Tesla’s true value is in its autonomous technology, which could continue to drive growth despite changes in EV policies.
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 98% rally in its share price over the past year, the average Tesla price target of $329.63 per share implies 20.5% downside risk.
