The incoming Trump administration team plans to scrap Biden's $7,500 consumer tax credit for electric vehicle purchases as part of broader tax reform legislation.
However, critics argue that the move could complicate the already struggling US electric vehicle transition.
Tesla, the nation's largest electric vehicle maker, has welcomed the decision with open arms as its CEO, Elon Musk believes removing the tax credit would hurt other automakers more than Tesla, potentially giving Tesla a competitive advantage, Reuters reported.
Musk has been a fervent supporter of electric cars and the reduction of carbon emissions, according to Electrek but his current stance seems to put Tesla's competitive edge ahead of the expansion of the industry as a whole.
The Trump administration thinks that getting rid of the EV tax credit would be simple and popular in a Republican-controlled Congress.
Congressional Republicans plan to take up the broader tax bill as one of their first actions.
More than half of all automobile sales in China, the largest auto market in the world, are hybrids and electric cars.
Though Tesla cannot compete with the price of Chinese EVs, potential Trump's actions—such as imposing a 100% tariff—may help keep them out of the US market.
After reports of Trump's plans to eliminate the $7,500 consumer tax credit for electric vehicles, Rivian's shares fell 14% to $10.31 and Tesla's stock price fell 5.77% to $311.18.
