2024 Election: A Pivotal Moment for Tech and EVs
The upcoming 2024 presidential election is shaping up to be a crucial turning point for numerous sectors, particularly technology and electric vehicles (EVs). The potential victory of either Donald Trump or Kamala Harris carries significant implications for investors and the future trajectory of these industries. A recent analysis by Wedbush Securities analysts delves into the potential impacts, highlighting key differences in policy approaches and their potential ramifications for major tech companies and EV manufacturers.
Key Takeaways: What to Expect From the 2024 Election
- A Trump victory could lead to increased tariffs and a slowdown in the AI revolution, potentially negatively impacting companies like NVIDIA, Apple, and Tesla.
- A Harris victory, on the other hand, is projected to be more favorable for the EV sector, with continued support for EV tax credits and incentives benefiting companies like General Motors, Ford, and Stellantis.
- The outcome of Congressional races will also play a significant role, potentially influencing policy changes for Big Tech regardless of the presidential winner. A Republican sweep could be bullish for the overall market but negative for Big Tech.
- Lina Khan’s position as FTC Chair is a critical factor. Her continued tenure, more likely under a Trump administration, could significantly impact regulatory pressure on Big Tech.
- Elon Musk’s endorsement of Trump introduces an important question; will this have a considerable effect on Tesla’s own outlook?
The Potential Impact of a Trump Presidency
Implications for the Tech Sector
Wedbush analysts express concerns about a potential Trump presidency’s global implications, particularly the risk of heightened tariffs. This could exacerbate tensions between the U.S. and China, creating significant challenges for the technology sector’s intricate global supply chains. Companies like NVIDIA, Apple, and Tesla were specifically identified as potentially vulnerable to retaliatory measures from China in response to increased tariffs. The analysts predict that a Trump administration could significantly “slow the pace of the AI revolution” through policy changes that directly or indirectly restrict the growth of AI-related businesses.
The Future of the EV Industry Under Trump
The analysts believe a Trump presidency would negatively impact the overall EV industry. They project that EV rebates and tax incentives would likely be reduced or eliminated. However, they suggest that Tesla might be uniquely positioned to weather this storm due to its size and established market position. The company could benefit from a competitive advantage as rivals struggle with reduced subsidies and higher tariffs on Chinese competitors. “Higher China tariffs that would continue to push away cheaper EV players (BYD, Nio, etc.) from flooding the US market over the coming years,” the analysts projected. This potential for reduced competition suggests a potential upside for Tesla even without government incentives.
A Harris Presidency: Opportunities and Uncertainties
A More Positive Outlook for EVs under Harris
The Wedbush analysts predict a more positive outlook for the electric vehicle sector under a Harris administration. They expect that existing EV tax credits would remain in place and potentially even increase in 2025. This policy continuity would be consistent with a Harris administration’s focus on transitioning to EVs. General Motors, Ford Motor Company, and Stellantis NV stand to benefit significantly; all three automakers are heavily invested in EV development and require continued market growth to maintain profitability.
Uncertainty for Tesla
The analysts’ outlook for Tesla under a Harris presidency is more nuanced. While the EV market generally benefits, Elon Musk’s visible support for Trump could present challenges. The analysts suggest Musk’s endorsement may have “negative consequences” for Tesla. While the current impact is limited, this political dynamic “could impact some customers to go away from Tesla when buying decisions ultimately come around over the next year,” the analysts cautioned. Essentially, the benefits of the broader EV market support could be partially offset by decreased consumer confidence in Tesla among some elements of the population.
The Crucial Role of Congressional Elections
The analysts emphasize the importance of Congressional races alongside the presidential race. The balance of power in Congress will significantly influence the overall policy landscape, potentially overriding some of the impacts predicted depending on the outcome of the Presidential race. A Republican sweep, meaning a GOP win in both the White House and Congress, is viewed potentially bullish for the overall stock market, but it could negatively affect Big Tech stocks due to the perceived contrasting policies involved. The outcome of these elections will drastically change the overall implications, potentially tempering or amplifying the effects of presidential policies.
Lina Khan’s Influence
The analysts identify FTC Chair Lina Khan as a crucial figure whose position could significantly influence the technology sector. Khan’s aggressive stance against major tech companies, advocating for potential breakups and increased regulations, has already made an impact. The analysts state that a Harris win likely implies Khan’s removal from her position, while a Trump administration would probably retain her. This variability brings a sizable uncertainty factor directly tied to the outcome of the election and suggests that whoever takes office, the resulting change could lead to significant policy shifts within the tech sector.
Conclusion: Navigating Uncertainty
The 2024 election presents substantial uncertainty for investors in the technology and electric vehicle sectors. The predictions outlined by Wedbush Securities highlight the potential for significant shifts depending on the presidential and Congressional results. Companies should brace themselves for shifts in policy direction which include but not limited to tariffs and corporate regulations, tax incentives and consumer support, and potentially even business structure modifications. Investors are recommended to keep a close eye on developments as the campaign progresses, noting shifts in relevant policies or positions of the leading candidates to better understand the implications for various sectors and make more informed investments. The outcome will not only shape the short-term trajectory of these industries but also have a lasting impact on their long-term growth and development and the future of the American economy.
