A few weeks after an election win, the Trump transition team’s plan to kill the $7,500 consumer tax credit on EVs has already surfaced. Although this type of climate-focused subsidy cut was widely rumored, the news still sent Tesla and Rivian shares lower. It’s a critical inflection point for the climate tech sector, which must evolve quickly from being subsidy-dependent to delivering standalone business value.
Moving forward, solutions need to be better, cheaper, or lighter—not just greener. While some will view this change as a significant setback for climate initiatives, it may actually make the next wave of climate tech startups more resilient than zero-interest-rates-era peers or those from the cleantech boom that initially catalyzed the industry. After all, the first solar energy bubble exploded because it had always been on shaky territory, almost solely propped up by government subsidies.
