Trump Weekly: Trump looks to drop EV tax credit, fuel-efficiency requirements

Here are the top industries and stocks that were impacted by the comments, actions and policies of President-elect Trump this week compiled by The Fly:

TRUMP MEDIA, BAKKT TALKS: Donald Trump’s social media company, Trump Media and Technology Group (DJT), is in advanced talks to buy Bakkt (BKKT), a cryptocurrency trading venue owned by IntercontinentalExchange (ICE), two people with knowledge of the talks told Financial Times’ Philip Stafford. Trump Media, which operates Truth Social, is closing in on an all-share purchase of Bakkt, the report said, citing sources. The valuation under discussion was not immediately clear but Bakkt’s market capitalization stood at just over $150M on Monday, the publication added. Bakkt said it was aware of the rumors regarding a potential transaction involving the company, but that “it is the company’s policy not to comment on market rumors or speculation.”

Meanwhile, Trump’s social media company is considering developing a cryptocurrency payment service, the latest sign of the president-elect’s embrace of the crypto industry, The New York Times’ Matthew Goldstein, David Yaffe-Bellany and Emily Flitter reported, citing a trademark application filed this week. Trump Media & Technology Group filed an application on Monday for a service called TruthFi, which it described as a platform for crypto payments, financial custody services and trading in digital assets.

FUEL-EFFICIENCY REQUIREMENTS: Donald Trump’s incoming administration is looking to lower fuel-efficiency requirements for new cars and light trucks as part of plans to unwind President Biden policies, Allyson Versprille and Jennifer Dlouhy of Bloomberg report, citing people familiar with the matter. Trump advisers plan to reexamine fuel economy requirements that were finalized in June, and are also targeting related standards imposed by the Environmental Protection Agency that limit tailpipe emissions of carbon dioxide and smog-forming compounds, sources told Bloomberg. The plan takes aim at a collection of President Biden’s policies to cut greenhouse gas emissions and push the auto industry toward electrification, Bloomberg says. Publicly traded companies in the car space include Ford (F), General Motors (GM), Honda (HMC), Mercedes-Benz (MBGYY), Nissan (NSANY), Stellantis (STLA), Tesla (TSLA), Toyota (TM) and Volkswagen (VWAGY).

ELECTRICAL INFRASTRUCTURE: Trump’s transition team plans to eliminate IRA’s EV tax credit, Bernstein said. The likely plan would be to eliminate this tax credit as a part of a broader tax reform legislation, which would require an act of Congress to repeal. That said, there is plenty the Trump administration could do to slow the disbursement of these credits, including reclassifying leases as ineligible, the firm added. Such a repeal would be the biggest headwind to distribution infrastructure spending, given EV charging tends to occur at home and a step change in an EV installed base was a tailwind for investment on the side of the grid, Bernstein noted.

The firm also believes that removing the EV tax credit would be a modest headwind to long-term electricity demand. Assuming electrical load growth declines from +1.7% to +1.5%, Bernstein estimates long term earnings growth algorithm shifts from 14% to 13% for Eaton (ETN), from 16% to 15% for Hubbell (HUBB), and from 15% to 14% for Quanta Services (PWR). All in, this change in would bring down the firm’s long term earnings power down by 3% for Eaton, 1% for Hubbell and 3% for Quanta Services. In Bernstein’s view, this risk is largely priced in as shares fell when news of the EV tax credit cut broke last Thursday.

MEDICARE ADVANTAGE PLANS: JPMorgan views President-elect Trump’s nomination of Dr. Mehmet Oz to the Centers for Medicare and Medicaid Services Administrator as a surprise pick to oversee Medicare, Medicaid and the Affordable Care Act Exchanges. While there is limited information to gauge the nomination from a policy perspective, the pieces of information indicate Oz would follow the conventional Republican approach to running CMS, the firm tells investors in a research note. JPMorgan points out that in an interview with AARP in 2022 during his unsuccessful Senate campaign, Oz said that, “We can expand Medicare Advantage plans. These plans are popular among seniors, consistently provide quality care and have a needed incentive to keep costs low.” The firm sees this as consistent with its expectations that CMS under Republican control would support Medicare Advantage. This is favorable for companies like Humana (HUM), UnitedHealth (UNH), CVS Health (CVS) and Elevance Health (ELV), JPMorgan adds.

MOBILE APP: The leaders of President-elect Donald Trump’s “Department of Government Efficiency,” to be run by Elon Musk and Vivek Ramaswamy, have discussed trying to create a mobile app for Americans to file their taxes free with the Internal Revenue Service, Jeff Stein of The Washington Post report, citing two people who spoke on the condition of anonymity to describe private conversations. The idea is not viewed as central to the commission’s work but could still emerge as a goal, according to the report. The conversations are described as highly preliminary, the paper added. Shares of Intuit (INTU) and H&R Block (HRB) traded lower following the report.

Following the report, Jefferies said it believes the selloff in Intuit shares following the WaPo report of a potential IRS mobile tax filing app is unwarranted. Such an app is unlikely to be a high priority “in a long list of initiatives to reduce government waste,” the analyst told investors in a research note. In addition, the IRS Direct File pilot had little success, reaching 0.1% of tax filers, while Intuit makes money on more complex, paying tax filers, not free and simple ones, said Jefferies.

CRYPTO ROLE: President-elect Donald Trump’s team is talking about creating a new White House post solely dedicated to cryptocurrency policy, Stephanie Lai, Olga Kharif and Lydia Beyoud of Bloomberg report, citing people familiar with the transition efforts. Trump’s team is vetting candidates to serve in such a role, sources told Bloomberg. Crypto industry advocates are pushing for the role to have a direct line to Trump, they added. Publicly traded companies in the crypto space include Bit Digital (BTBT), Bitfarms (BITF), Coinbase (COIN), Core Scientific (CORZ), Greenidge Generation (GREE), Mara Holdings (MARA), MicroStrategy (MSTR), Riot Platforms (RIOT), Stronghold Digital Mining (SDIG) and TeraWulf (WULF).

GOLDMAN: Goldman Sachs (GS) CEO David Solomon, in an interview on CNBC on Wednesday, noted that capital markets activity is picking up due to policy and sees more robust capital markets in 2025. Solomon said there are “gives and gets” in the new administration’s expected policies, but overall the market is responding to the idea that the new administration will be more pro-growth. Solomon said he has not spoken directly with President-elect Trump.

BOEING: Boeing (BA) CEO Kelly Ortberg said that he recently spoke with President-elect Donald Trump to discuss the potential impact of tariffs on the company, The Wall Street Journal reported.

CROWN ELECTROKINETICS: Crown Electrokinetics (CRKN) highlighted the potential impact of the incoming Trump administration on its lead pipe detection and remediation businesses, Element 82 and PE Pipelines. While many new EPA programs may face a regulatory freeze on January 20, 2025, the finalized LCRI legislation, effective December 30, will remain intact.