President Trump’s Climate Rollbacks Could Derail Tesla’s 2025 Sales Goals

Key Takeaways

• On the day of his inauguration, President Trump signed an executive order seeking to repeal electric vehicle tax credits.
• Scrapping the subsidies could hurt Tesla’s sales numbers.
• Wall Street analysts are skeptical of whether Tesla can reach its sales targets for 2025.

Despite Tesla sales declining for the first time on record in 2024, CEO Elon Musk has forecast 20-30% sales growth in 2025. 

But as the company faces growing global competition and the end of U.S. subsidies for electric vehicles (EVs), Wall Street analysts are predicting that Tesla won’t meet Musk’s ambitious target.

Trump Targets EV Subsidies

In an Executive Order signed on his first day in office, Donald Trump called for the “elimination” of subsidies and other “market distortions that favor EVs over other technologies.”

One obvious target of the order is tax credits of up to $7,500 for new EV purchases introduced by the Biden administration. 

Tesla CEO Elon Musk has previously said he supports Trump’s plans to scrap EV tax credits and implied that he isn’t worried about the impact on Tesla’s sales numbers.

As Musk put it in an X post in 2024: “Take away the subsidies. It will only help Tesla.”

Nonetheless, Investment Advisor Ross Gerber recently warned that the loss of federal subsidies will “crater” EV sales and even put Tesla’s profitability at risk. 

Potential Growth Drivers

In an October third-quarter earnings call , Tesla executives sought to downplay underwhelming sales numbers by highlighting the company’s ambitious robotaxi plans and packed new model lineup.

This includes the long-awaited second-generation Roadster, an updated Model Y expected to hit the market imminently, and the Tesla Semi—a commercial big rig that, although it officially debuted in 2022, still hasn’t been delivered at any real scale. 

Investors Skeptical of Tesla Promises

In addition to updates to Tesla’s existing lineup, Musk has also teased a new entry-level vehicle that could retail for as little as $25,000.

However, given that the company has repeatedly failed to deliver new models on time, investors aren’t holding their breath.

As Karl Brauer, an analyst at iSeeCars.com stated recently,“I don’t see that coming onto the market and causing [Musk’s targeted] level of growth.”