Tesla shares dropped by almost 3% after President Trump signed a resolution to strip California of its power to set air pollution rules. The move could significantly impact automakers, especially Tesla, which relies heavily on zero-emission vehicle credits. These credits have been crucial for Tesla’s non-vehicle income stream, with the company earning nearly $3 billion from sales over the past year.
California’s emission standards require about two-thirds of new vehicles sold by 2030 to be zero-emission. The policy shift could also affect Rivian Automotive and Lucid Motors, which have seen their shares decline in pre-market trading.
Tesla’s AI ambitions have become a key focus for investors, with some betting on the technology as more valuable than car sales. The company is set to roll out its AI-powered robo-taxi service in Austin, Texas. However, analysts give Tesla a Hold consensus rating, with an average stock price target of $285.97, suggesting a potential downside of over 10.4% from the current level.
The move deals a blow to the EV industry’s regulatory advantages and threatens to reshape the future of U.S. EV adoption and climate regulation.
Source: https://www.tipranks.com/news/tesla-stock-falls-whats-spooking-tsla-investors-right-now