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Stock prices of European automakers including Stellantis NV (NYSE:STLA) and Volkswagen AG (OTC:VWAGY) stocks dropped Friday after some plug-in hybrid electric vehicles (PHEVs) lost access to US tax credits under President Joe Biden‘s Inflation Reduction Act effective this week.
President-elect Donald Trump attacked Biden’s pro-EV initiatives and threatened tariffs on foreign-made cars, which Tesla Inc (NASDAQ:TSLA) chief and key Trump ally Elon Musk supported.
Musk also expressed opposition to every government subsidy, including those for EVs, oil and gas. Meanwhile, Tesla Inc’s (NASDAQ:TSLA) Cybertruck now qualifies for $7,500 electric vehicle consumer tax credits
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Volkswagen’s ID.4 electric crossover sport utility vehicle (SUV) lost its entire tax credit, Bloomberg cites the Department of Energy and Environmental Protection Agency.
Nissan Motor Co (OTC:NSANF) (OTC:NSANY) and Stellantis models also lost access to U.S. tax credits.
Currently, 18 EV and plug-in hybrid models qualify for a credit, compared to 22 in 2024.
Volkswagen has long grappled in the U.S. with its Scout line of battery-powered sport utility vehicles as growth tapered in Europe and rivalry amplified in China. VWAGY stock plunged 28% in the last 12 months.
Stellantis stock plunged 41% in the last twelve months due to product delays and overblown inventories in the U.S. Its passenger-car production in Italy slipped 46% in 2024 as models like the electric Fiat 500 failed to gain traction.
Analysts expect U.S. new-car sales in 2024 to surpass 15.8 million units backed by inventories and incentives. The expect EV sales in the U.S. to reach 1.3 million as consumers rush to avail tax credits before potential changes under the new government.
Price Action: Stellantis stock is down 2.03% at $12.52 premarket at last check Friday.
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