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Tesla Inc (NASDAQ:TSLA) CEO Elon Musk‘s decision to overhaul the electric-vehicle (EV) charging team within the Austin, Texas-based company threatens the Biden administration’s plans to electrify highways.
What Happened: Musk, who stated that he’s “leaning away” from President Joe Biden while appearing seemingly warm toward Republican Donald Trump in the 2024 presidential election, reportedly cut about 500 people from Tesla’s supercharger group.
The implications for the slow rollout of new fast-charging stations may delay the Biden administration’s plan to enhance the nation’s charging infrastructure, which aims to stimulate EV adoption and reduce emissions.
Trump, meanwhile, has been courting oil industry executives for donations and pledging to dismantle Biden's pro-EV plans in return.
Under the National Electric Vehicle Infrastructure (NEVI) program, the Biden administration earmarked $5 billion over five years to facilitate the construction of 500,000 EV chargers across the country.
Tesla took over $17 million in federal funds to expand its charging network. It then laid off its supercharger team and cut its infrastructure goal.
However, since news of Tesla’s abrupt restructuring surfaced, executives at various charging companies are angry. Landlords are now reportedly seeking new partners for private charging projects.
Also Read: Tesla Cuts More Jobs In China As Competition Heats Up
Why It Matters: Charging companies are now bracing for Tesla’s potential exit from the federal program, which could impede NEVI’s rollout.
Tesla’s change in strategy not only impacts the NEVI program but also sends shockwaves throughout the EV industry.
Competitors like Blink Charging (NASDAQ:BLNK) have witnessed a surge in inquiries from states where Tesla has withdrawn from projects.
Tesla’s shift in focus towards existing locations could create opportunities for other charging startups and recently laid-off employees.
Federal authorities insist that individual business decisions won’t affect government-funded projects. However, the uncertainty surrounding Tesla’s plans casts a shadow over future EV infrastructure development in the U.S.
Tesla stock has gained more than 3% in the last 12 months. Investors can gain exposure to the stock via two ETFs. They include the Consumer Discretionary Select Sector SPDR Fund (NYSE:XLY) and Fidelity MSCI Consumer Discretionary Index ETF (NYSE:FDIS).
Price Action: TSLA shares are trading higher by 0.59% at $172.99 at the last check Friday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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