Sky News Daily Can Tesla survive without Trump?
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Jul 17, 2025 Paul Kelso, Sky's business correspondent, investigates Tesla's precarious financial future following Donald Trump's government subsidy cuts. He discusses how essential these subsidies have been to Tesla's success and explores the potential impacts of changing tax policies and consumer attitudes. The conversation highlights Tesla's dependence on government support for profitability while navigating market fluctuations. Kelso also delves into the tumultuous relationship between Musk and Trump, examining how political dynamics could shape Tesla's prospects.
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Tesla's Profits Rely on Subsidies
- Tesla made nearly $100 billion in revenue and $7.1 billion profit last year.
- Over 38% of its profit came from trading state-level carbon credits, crucial for its earnings.
Federal Tax Credit Impact
- The $7,500 federal tax credit reduction makes Tesla cars about 16-17% more expensive in the US.
- This tax credit removal alone could cost Tesla nearly $5 billion in discounts annually.
Elon Musk's Political Impact
- Tesla's sales have declined globally partly due to Elon Musk's political fallout.
- Tesla uniquely profits from state carbon credits as it only makes EVs, unlike competitors who must buy credits.