Analyst Explains Impact of Trump’s Bill on Tesla (TSLA) – ‘Direct Hit to Cash Flow’

Tesla, Inc. (NASDAQ:TSLA) is one of the 10 Buzzing Stocks to Watch as AI Trade Makes a Comeback.

Jed Dorsheimer, William Blair energy and power tech group head, recently talked about Tesla during a program on CNBC. He believes Trump’s new tax bill will directly impact the company.

“I mean it’s going to affect the cash flow of the business certainly. And so when you look at the combination of the $7,500, that just meant that the pricing of US vehicles are going to get more expensive. Or they’re going to have to cut the pricing in order to keep that same level of demand, and that will cut into margins and affect cash flow. And then the tax credits going away in terms of the zero emission — that, you know, is a direct hit to cash flow.”

Tesla’s EV sales are falling all over the world as the company faces challenges from competitors. Even if Elon Musk increases his focus to fix the company’s problems, it would take a lot of effort to come out of the demand crisis. For example, in California, the largest U.S. market for electric vehicle adoption and sales, Tesla sales fell about 12% year over year in 2024, causing its market share to drop from 60.1% in 2023 to 52.5% in 2024. Was it because Californians are buying fewer EVs? No. Californians purchased more than 2 million electric cars during the year, almost double when compared to the past two years.

Photo by J Dean on Unsplash

Macquarie Large Cap Growth Fund stated the following regarding Tesla, Inc. (NASDAQ:TSLA) in its Q1 2025 investor letter:

“At the individual stock level, the greatest contribution was attributable to not owning Tesla, Inc. (NASDAQ:TSLA), and our positions in Intercontinental Exchange Inc. (ICE) and Visa Inc. Tesla faced well-publicized headwinds last quarter that may bleed into future periods. This has remained a constant stock of debate among the investment community and is volatile as a result. The business has never met our quality standards and we are happy to sit on the sidelines of this battleground stock.”

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Disclosure: None. This article is originally published at Insider Monkey.