Tesla could take a major hit from Trump’s Big, Beautiful Bill, analyst warns, and it might not be pretty

Tesla stock is stumbling again in June after gaining steadily in May and according to one top Wall Street analyst, the road ahead could get a lot bumpier, as per a report.

Donlad Trump-Backed Bill Sparks Concerns About Tesla

A JPMorgan analyst warned that the latest legislation backed by US President Donald Trump, which is branded as the “One Big Beautiful Bill Act”, could pose serious financial risks for Tesla, according to The Street

The proposed bill, currently gaining traction on Capitol Hill, could hammer Tesla’s bottom line by eliminating key tax incentives and regulatory programs that have helped the company’s profits, according to JPMorgan analyst Ryan Brinkman, reported The Street.

JPMorgan Analyst Flags Major Tesla Earnings Risk

While, Trump’s economic policies usually benefit corporations and wealthy individuals, his newest bill might hamper 52% off Tesla’s Earnings Before Interest and Taxes (EBIT), which is a key financial metric, as per the report. Brinkman estimated, that if the "One Big Beautiful Bill" is passed, it could lead the EV maker to take an additional $2 billion hit, amounting to abput 33% of its EBIT, reported The Street.

The analyst highlighted that, “The legislation would get rid of the $7,500 federal tax credit EV buyers receive, resulting in a $1.2 billion (19% of its EBIT) headwind for the company thanks to lower demand and margins,” quoted The Street. He also pointed out that, “Additionally, [it] would outlaw the California Air Resources Board’s ZEV program, which furnishes Tesla with regulatory credits. Without them, Tesla would have posted a loss last quarter,” as quoted in the report.

FAQs

Why is Tesla stock dropping in June?
Because of fears surrounding new legislation that could slash federal EV incentives and eliminate regulatory programs Tesla benefits from.

How much could Tesla lose if the bill passes?
An estimated $2 billion, which would be about 33% of its EBIT, according to JPMorgan.