Former US President Donald Trump hinted that the $7,500 tax credit for the purchase of electric vehicles could be eliminated if he is re-elected. Trump also expressed his openness to the appointment Elon MuskCEO of Tesla Inc. TSLinto a cabinet or advisory position.

What happened: Trump, the Republican presidential candidate, made these statements during an interview with Reuters after a campaign rally in York, Pennsylvania, on Monday. He suggested that tax credits and incentives in general are not beneficial and that he would consider eliminating the EV credit.

“Tax credits and tax incentives are generally not a very good thing,” Trump said.

When asked if Musk could take on an advisory role or a cabinet post, Trump answered in the affirmative and praised Musk’s intelligence. Musk had previously supported Trump in the US presidential election campaign.

“He’s a very smart guy. If he did it, I would definitely do it. He’s a brilliant guy,” Trump said.

If elected, Trump could potentially reverse Treasury Department rules that made it easier for automakers to use the $7,500 tax credit, or ask Congress to eliminate it altogether. During his presidency, Trump had sought to eliminate the electric vehicle tax credit, a move later reversed by President Joe Biden in 2022.

Trump also hinted at plans to impose new tariffs to block the export of vehicles from the three Detroit automakers and other Mexican manufacturers to the U.S. market. He also threatened to prevent Chinese automakers from building new factories in Mexico to produce vehicles for the U.S. market.

See also: Elon Musk argues with Mark Cuban again after the “Shark Tank” star denounces the Tesla founder for manipulating the X algorithm

Why it is important: The potential elimination of the electric vehicle tax credit comes at a time when the relationship between Trump and Musk appears to be strengthening. Recently, Musk expressed interest in inviting Trump to visit Tesla’s Giga Texas, emphasizing Trump’s support for American manufacturing.

Additionally, the partnership between Trump and Musk has raised eyebrows given their past disagreements on climate change and electric vehicles. According to CNBC, their alliance could significantly impact the future of the electric vehicle industry.

In addition, the House Judiciary Committee recently condemned the European Union for allegedly attempting to intimidate Musk’s social media platform X. The committee’s actions underscore the ongoing tensions surrounding Musk’s ventures and their intersection with political interests.

Price promotion: Tesla stock closed at $222.86 on Monday, up 3.12%. In after-hours trading, the stock lost 0.38%. Year-to-date, Tesla stock has fallen 10.29%, according to data from Benzinga Pro.

Read more:

Image via Shutterstock

This story was created with Benzinga Neuro and edited by Kaustubh Bagalkote