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New Straits Times
7 hours ago
- Automotive
- New Straits Times
Trump-Musk row slams Tesla shares, US$150bil in market value wiped out
NEW YORK: Tesla shares went into free-fall on Thursday as President Donald Trump publicly feuded with the electric vehicle maker's billionaire CEO Elon Musk, his self-proclaimed "First Buddy". Investors watched the unfolding drama with growing worry about what the fracas could mean for Musk's business empire. The carmaker's shares ended the day down 14 per cent, wiping off US$150 billion in market value on a day absent other news about the company. Traders dumped Tesla in heavy trading after Musk quickly responded to Trump's criticism with social media posts that stepped up criticism of the president's tax bill. Trump fired back further, alleging Musk was upset because the bill takes away tax benefits for electric vehicle purchases. Openly feuding with Trump could pose multiple hurdles for Tesla and the rest of Musk's sprawling business empire. The US Transportation Department regulates vehicle design standards and would have a big say in whether Tesla can mass-produce robotaxis without pedals and steering wheels. The agency is also investigating Tesla's driver-assistance software, known as "Full Self-Driving", following a fatal crash. "Elon's politics continue to harm the stock. First he aligned himself with Trump, which upset many potential Democratic buyers. Now he has turned on the Trump administration," said Tesla shareholder Dennis Dick, chief strategist at Stock Trader Network. With EV sales falling, Musk over the last year has re-oriented Tesla's future around self-driving robotaxis. On an earnings call last year, he said investors "should sell their Tesla stock" if they did not believe the company would solve the technological challenges of driverless vehicles. Wedbush analysts have said the AI and autonomous opportunities could be worth US$1 trillion alone in market value for the company. Musk has advocated for one federal approval process for autonomous vehicles to streamline the current maze of different state regulations. Ross Gerber, CEO of Tesla investor Gerber Kawasaki Wealth and Investment Management, said the feud with Trump "creates a negative force against Tesla" that could jeopardise regulations and risk more government investigations. "Every benefit that was perceived he would have got now turns into a negative," Gerber said. Musk, the world's richest man and a key figure in the Department of Government Efficiency's (DOGE) cost-cutting plan for several months, blasted Trump's "big beautiful bill" this week, after he decided to spend less time in the White House and instead focus on his companies. Following Thursday's selloff, his net worth fell by roughly US$27 billion to US$388 billion, according to Forbes. Trump on Thursday said on his Truth Social platform that the "easiest way to save money in our Budget, billions and billions of dollars, is to terminate Elon's governmental subsidies and contracts". Transportation Secretary Sean Duffy has already moved to exempt autonomous vehicles from some safety requirements, and NHTSA said in April it is "actively engaged in developing a multi-faceted regulatory framework" for autonomous vehicles. Although the federal government has already started to streamline some regulations around autonomous driving, Morningstar analyst Seth Goldstein said regulators might possibly craft rules in a way that would single out Tesla. Most autonomous vehicle companies use sensors such as radar and lidar to detect objects, for example, but Tesla relies solely on cameras. Goldstein said federal regulators might devise rules requiring lidar, which would hurt Tesla. "With President Trump, being on his bad side always creates risk that you're going to get personal retaliation," Goldstein said. He doubted that such an outcome was likely, though, because many other companies have been pushing for new regulations for years. The stock has been on a roller-coaster ever since Musk endorsed Trump in mid-July 2024 in his re-election bid, gaining 169 per cent from that point through mid-December. That was followed by a 54 per cent slide through early April as a "Tesla Takedown" protest intensified. Musk's leadership of DOGE and alignment with the Trump administration had put off some car buyers, with sales slumping in Europe, China and key US markets like California. The House of Representatives version of Trump's budget bill proposes largely ending the popular US$7,500 EV subsidy by the end of 2025. Tesla and other automakers have relied on incentives for years to drum up demand, but Trump promised during the transition to end the subsidy. Tesla could face a US$1.20 billion hit to its annual profit, along with an additional US$2 billion setback to regulatory credit sales due to separate Senate legislation targeting California's EV sales mandates, according to J.P. Morgan. The company is still the most valuable automaker worldwide by a long shot. Through Wednesday, Tesla's market value stood at about US$1 trillion, well above Toyota Motor's US$290 billion. "There were a lot of people excited about Tesla because the political winds were at his (Musk's) back. And now they've turned into headwinds in a lot of different ways," Steve Sosnick, chief strategist at Interactive Brokers, said. Tesla trades at 150 times profit estimates, a steep premium to other Big Tech stocks such as Nvidia.
Time of India
20-05-2025
- Automotive
- Time of India
US expected to declare Biden fuel economy rules exceeded legal authority
The US Transportation Department is expected to declare that fuel economy rules issued under then President Joe Biden exceeded the government's legal authority by including electric vehicles in setting the rules, automaker officials said Monday. Transportation Secretary Sean Duffy said the department's National Highway Traffic Safety Administration on Friday submitted its interpretive rule, "Resetting the Corporate Average Fuel Economy Program " to the White House for review. The prior administration had "illegally used CAFE standards as a backdoor electric vehicle mandate - driving the price of cars up," he said in a statement. Removing EVs from the calculations for credits and the regulatory mandates could result in lower overall fuel economy requirements. NHTSA in June said it would hike CAFE requirements to about 50.4 miles per gallon (4.67 liters per 100 km) by 2031 from 39.1 mpg currently for light-duty vehicles. Last year, 120 Republican lawmakers said NHTSA exceeded its authority by adopting fuel economy standards "that effectively mandate EVs while at the same time force the internal combustion engine out of the market." The lawmakers said the agency "accounted for EVs in its regulatory baseline and factored that baseline into its determination of the maximum achievable CAFE standards." House Republicans last week proposed killing the EV tax credit and repealing fuel efficiency rules designed to prod automakers into building more zero-emission vehicles as part of a broad-based tax reform bill. Federal law requires NHTSA to set CAFE standards at the maximum feasible level. The Environmental Protection Agency also plans to reconsider parallel vehicle emissions rules and rescind California's legal authority to ban sales of gas-only vehicles by 2035. The US Senate this week may take up legislation passed by the House to rescind the approval for California's rules. Automakers like General Motors and Toyota are aggressively lobbying for repeal. NHTSA said last year the rule would reduce gasoline consumption by 64 billion gallons and cut emissions by 659 million metric tons. The agency said while some vehicles would be more expensive to buy, consumers would save on fuel costs with estimated net benefits of $35.2 billion.
New Straits Times
20-05-2025
- Automotive
- New Straits Times
US expected to declare Biden fuel economy rules exceeded legal authority
WASHINGTON: The US Transportation Department is expected to declare that fuel economy rules issued under then President Joe Biden exceeded the government's legal authority by including electric vehicles in setting the rules, automaker officials said Monday. Transportation Secretary Sean Duffy said the department's National Highway Traffic Safety Administration on Friday submitted its interpretive rule, "Resetting the Corporate Average Fuel Economy Program" to the White House for review. The prior administration had "illegally used CAFE standards as a backdoor electric vehicle mandate – driving the price of cars up," he said in a statement. Removing EVs from the calculations for credits and the regulatory mandates could result in lower overall fuel economy requirements. NHTSA in June said it would hike CAFE requirements to about 50.4 miles per gallon (4.67 liters per 100 km) by 2031 from 39.1 mpg currently for light-duty vehicles. Last year, 120 Republican lawmakers said NHTSA exceeded its authority by adopting fuel economy standards "that effectively mandate EVs while at the same time force the internal combustion engine out of the market." The lawmakers said the agency "accounted for EVs in its regulatory baseline and factored that baseline into its determination of the maximum achievable CAFE standards." House Republicans last week proposed killing the EV tax credit and repealing fuel efficiency rules designed to prod automakers into building more zero-emission vehicles as part of a broad-based tax reform bill. Federal law requires NHTSA to set CAFE standards at the maximum feasible level. The Environmental Protection Agency also plans to reconsider parallel vehicle emissions rules and rescind California's legal authority to ban sales of gas-only vehicles by 2035. The US Senate this week may take up legislation passed by the House to rescind the approval for California's rules. Automakers like General Motors and Toyota are aggressively lobbying for repeal. NHTSA said last year the rule would reduce gasoline consumption by 64 billion gallons and cut emissions by 659 million metric tons. The agency said while some vehicles would be more expensive to buy, consumers would save on fuel costs with estimated net benefits of US$35.2 billion.
Bloomberg
13-05-2025
- Business
- Bloomberg
Southwest Air Hints at International Expansion in DOT Request
Southwest Airlines Co. has filed with the US Transportation Department for authority to fly to any country with which the US has an Open Skies aviation agreement, signaling the carrier intends to expand its small international route network. Approval of the request could allow Southwest to fly to countries in Europe, the UK, much of Latin America and parts of Asia and Africa. The Dallas-based airline also sought the ability to transport 'persons, property and mail' to countries that enter aviation agreements with the US in the future, according to the document.
