After a lackluster start for the first half of the year, it’s been a welcoming contrast in the second half for Tesla’s stock. The ever-changing regulatory landscape for the electric vehicle (EV) industry could provide further tailwinds if they blow in Tesla’s favor and the whole EV industry.
Tesla CEO Elon Musk’s role at the helm of the newly created Department of Government Efficiency (DOGE) could skew regulation in the EV industry’s favor. There’s already news that regulatory measures are in the works for self-automated vehicles, which is where Tesla has been an early pioneer.
The electric automaker’s already up close to 30% for the year, largely putting the first half of 2024 behind it. If more bullishness is on the way in 2025, traders will want to maximize profits with the Direxion Daily TSLA Bull 2X Shares (TSLL).
As seasoned traders know, having flexibility is a must in order to profit from a stock that’s trending higher or lower. As such, traders can take advantage of price dips via the Direxion Daily TSLA Bear 1X Shares (TSLS). If the electric automaker sees an unfavorable earnings report or other negative news, TSLS allows traders to take advantage of the short-term price pullbacks.
Eliminating EV Tax Credits
Demand for EVs has yet to keep pace with supply, which is where tax credits are a boon in order to boost incentives to buy more vehicles. However, the incoming administration under President-elect Donald Trump may look to end existing incentives under the current administration. It remains to be seen how this affects EVs, but arguments against it are already formulating.
“It would be so counterproductive,” said U.S. Energy Secretary Jennifer Granholm, noting that it could decrease the competitiveness of the U.S. EV market especially when it comes to market share versus China. “You eliminate these credits, and what do you do? You end up ceding the territory to other countries, particularly China.”
Nonetheless, if it remains a minor blip on the radar screen as the world transitions to more EVs on the road, then traders can stay bullish on the industry with the Direxion Daily Electric and Autonomous Vehicles Bull 2X Shares (EVAV). The fund seeks to achieve 200% of the daily performance of the Indxx US Electric and Autonomous Vehicles Index. It’s an ideal option for broad-based exposure to the EV market, with double leverage to maximize gains as opposed to simply concentrating on one stock.
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