Can Tesla survive without the $7,500 EV credit?

The Big Beautiful Bill just passed the Senate.

Among other things, it will eliminate a $7,500 tax credit for buying a new EV.

This credit is a crucial subsidy for EV makers. EVs are expensive. On average, a new one costs $56,000, vs. $48,000 for a new gas-powered car.

The $7,500 credit essentially covers the difference, and can be taken at the time of purchase. It has seriously accelerated the adoption of EV cars.

A lot of people think Trump is getting back at Elon for by removing the tax credit. In fact, he’s doing him a favor.

I know what you’re thinking. How can the elimination of a generous EV subsidy be good for Tesla?

Because Tesla is the only EV company that can thrive without the tax credit.

GM only makes about $2,000 on each EV it sells. Toyota makes even less, just $1,200 per EV. And Ford loses $760 on every EV it rolls out of its factories.

Tesla, on the other hand, makes $9,500 per car.

Musk built huge state-of-the-art factories that keep production costs to a minimum. Here’s a snapshot from inside Tesla’s Gigafactory in Texas. It looks like something from the future:

Source: Tesla

What do you think will happen when the other car companies can no longer take advantage of the $7,500 subsidy?

They’ll either have to lower the price, putting their EV divisions deep in the red. Or sell far fewer EVs.

While this will disrupt the whole EV market, Tesla will be fine.

Back in April, we told members of our Disruption Investor advisory that TSLA was an “absolute steal.”

The stock rallied 25% since.

Even though it’s no longer a “screaming buy,” our Chief Investment Strategist Chris Wood still considers a great long-term investment. Add some to your portfolio if you can.

Subscribe for more.