Investing.com - A victory for Donald Trump in the the all-important US presidential election on Tuesday would be an "overall negative" for the electric vehicle industry but a "potential positive" for EV giant Tesla (NASDAQ:TSLA), according to analysts at Wedbush.
In a note to clients, the analysts led by Daniel Ives argued that Trump would likely scrap EV rebates and other tax incentives for purchasing non-combustion engine cars should he return to the White House for another four-year term.
However, they noted that Tesla -- whose boss Elon Musk has been an ardent supporter of Trump -- still has "the scale and scope that is unmatched in the EV industry."
The company could in turn have a "clear advantage" as its domestic rivals grapple with a non-EV subsidy environment, the analysts said, adding that Trump's proposal to slap steep tariffs on China would also keep low-cost Chinese EV names like BYD (SZ:002594) and Nio (NYSE:NIO) from "flooding the US market over the coming years."
Trump could also fast-track Musk's autonomous driving initiatives, accelerating Tesla's targets for the technology, the Wedbush analysts said. At an event last month, Musk claimed Tesla's new Cybercab robotaxi would be in production "before 2027."
Yet Musk's backing of Trump "clearly could have a negative impact on some aspect of [Tesla's] EV consumer demand in the US," the analysts said.
"For now, the 'Musk betting on Trump bet' has seen a limited negative impact on demand in the US although clearly this political dynamic could impact some customers to go away from Tesla when buying decisions ultimately come around over the next year," they said.
The race between Trump, the Republican Party candidate, and his Democratic rival Kamala Harris is extremely close with the vote only one day away. Over the weekend, both Trump and Harris were campaigning furiously in key battleground states that could heavily sway the outcome of the ballot.
Harris received a particular boost when a respected survey out of the traditionally conservative-leaning state of Iowa showed her leading Trump by three percentage points, due in large part to support among women.
Still, the contest remains virtually tied. A New York Times/Siena poll suggested that Harris was clinging to leads in Nevada, North Carolina, Georgia and Wisconsin, while Harris and Trump were even in the crucial swing states of Pennsylvania and Michigan. In Arizona, Trump holds a three percentage point advantage.