If there’s one word in the dictionary that Wall Street and investors both dislike, it’s the word “uncertainty.” Uncertainty in the automotive industry is particularly bad, as the vehicle design and development process can take many months, and it’s done in anticipation of…
rkets years down the road. Last year, the Trump administration injected uncertainty into the automotive industry when it slapped new tariffs on imported vehicles and automotive parts, and ended the valuable $7,500 federal electric vehicle (EV) tax credit
The ensuing drop in EV demand and sales was significant. However, there’s finally a little good news for EV makers such as Tesla (NASDAQ: TSLA), and even more for traditional automakers such as Ford Motor Company (NYSE: F). EV demand returns!
Even without the federal tax credit helping to offset the high cost of EVs, sales of EVs jumped to their strongest level since the government ended the EV tax credit last fall. Preliminary numbers estimate that more than 85,000 EVs were sold in the U.S. in May, marking a noticeable rebound since the prior year’s third-quarter result. As investors know, the automotive industry has a lot of moving parts, and understanding the driving forces is just as important as the sales data itself.