Trump Trade: Transition team to roll back Biden EV, emissions policies

Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President-elect Trump with this daily recap compiled by The Fly:

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 (GM). Cutting government EV support could also hurt sales of Elon Musk’s Tesla (TSLA), the dominant U.S. EV seller. Other publicly traded companies in the space include Rivian (RIVN), Lucid (LCID), Nio (NIO), Xpeng (XPEV), Li Auto (LI), Nikola (NKLA), and Zeekr (ZK).

TARIFFS POSE RISK FOR SUPPLIERS: Trump’s threatened tariffs are a challenge as most suppliers export components into the U.S. to some degree, Wells Fargo tells investors in a research note. The firm notes Aptiv (APTV), Visteon (VC), and Lear (LEA) would face considerable risk given most of their Mexico components are sold into the U.S. Alternatively, Dana (DAN) and Magna (MGA) would screen better if Canada is spared. If a 10% tariff is put in place against Mexico, BorgWarner (BWA) and TE Connectivity (TEL) face minimal risk to total EBIT, while Aptiv, Visteon, Lear, and Adient (ADNT) EBIT risk would be 20%-plus.

Wells Fargo downgraded Adient to Equal Weight from Overweight with a price target of $20, down from $27, and lowered price targets for Aptiv, Autoliv, BorgWarner, Lear, Magna, TE Connectivity, and Visteon.

TECH INDUSTRY: Over the past week, Meta (META), Amazon (AMZN), and OpenAI’s Sam Altman have each donated $1M to support President-elect Donald Trump’s inaugural committee, Theodore Schleifer and David Yaffe-Bellany of The New York Times report. Additionally, Google (GOOGL) CEO Sundar Pichai and founder Sergey Brin dined with Trump on Thursday, while Apple (AAPL) CEO Tim Cook shared a meal with Trump on Friday. This was the week when many tech companies and their top executives decided to make donations and connections in order to get business done with Trump’s Washington.

STOCK CONSIDERATIONS, PRICE TARGET CHANGES:

Shares of ICF International (ICFI) have declined 27% since the U.S. presidential election on November 5, Barrington tells investors in a research note. The firm believes the decline in the share price has been driven in part by the incoming Trump administration’s creation of the Department of Government Efficiency, an outside advisory group that will examine ways to reduce federal government spending and the size of the U.S. government, which has created more “headline risk” as opposed to significant business risk. Barrington reiterates an Outperform rating and $174 price target on ICF shares and says the selloff presents a buying opportunity.

Wedbush raised the firm’s price target on Tesla to $515 from $400, while keeping an Outperform rating on the shares. 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. Wedbush’s “bull case” is $650 per share for Tesla in 2025. 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.

OTHER NEWS:

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.

President-elect Donald Trump appointed Truth Social (DJT) CEO Devin Nunes to lead the President’s Intelligence Advisory Board, which oversees the U.S. intelligence community. In a post, Trump said, “I am pleased to announce that I will appoint Truth Social CEO Devin Nunes as Chairman of the President’s Intelligence Advisory Board, which consists of distinguished citizens from outside of the Federal Government. While continuing his leadership of Trump Media & Technology Group, Devin will draw on his experience as former Chairman of the House Intelligence Committee, and his key role in exposing the Russia, Russia, Russia Hoax, to provide me with independent assessments of the effectiveness and propriety of the U.S. Intelligence Community’s activities. Congratulations Devin!”

President-elect Trump could resurrect his first-term goal to overhaul the U.S. Postal Service, which would influence how e-commerce giants operate, impact hundreds of thousands of government jobs and potentially undercut reliable delivery to more remote areas, Axios’ Natalie Daher posts. America’s mail carrier is the second most-beloved federal agency behind the National Park Service, polling shows. Like many industries, the rise of the internet has hurt its bottom line – and its leadership has failed to reverse that financial trend in recent years, the author notes. Trump is said to have talked with his commerce secretary pick Howard Lutnick at Mar-a-Lago about his interest in overhauling the agency. He reportedly said the government shouldn’t subsidize the mail agency given its recurring losses.