Investing.com -- Rivian (NASDAQ:RIVN) shares dropped 2% following President Donald Trump's directive to review and potentially eliminate policies and subsidies that favor electric vehicles (EVs). The executive order issued by Trump aims to reassess government support for the EV sector, which he describes as "ill-conceived government-imposed market distortions."
The administration's move could hinder the adoption of cleaner vehicles in the United States by targeting incentives that have been instrumental in promoting EV sales. The order specifically calls for an end to waivers that permit states to set their own limits on gas-powered car sales, a direct challenge to California's stringent zero-emission vehicle requirements.
In addition, Trump has halted the disbursement of funds from two significant pieces of legislation signed by President Joe Biden: the Inflation Reduction Act and the Infrastructure Investment and Jobs Act. The latter had earmarked $7.5 billion for the expansion of a nationwide network of EV charging stations.
While the potential rollback of EV benefits could have far-reaching implications for the industry, the actual impact on companies like Rivian will depend on the specifics of any policy changes enacted. The review and revision process could take months to finalize, and any substantive alterations would require congressional approval, particularly regarding the $7,500 federal tax credit for EV purchases.
Investors in Rivian and the broader EV market are closely monitoring these developments as they assess the potential challenges and shifts in the regulatory landscape that could affect the industry's growth trajectory.
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