Trump transition team reportedly to abolish electric vehicle subsidies

[Anchor]

Today (Nov.15), the stock prices of electric vehicle and battery companies plummeted in both the U.S. and South Korean markets.

This is due to reports that the Trump administration plans to abolish electric vehicle subsidies.

Our correspondent Park Il-jung in New York reports.

[Report]

Currently in the U.S., if you purchase an electric vehicle that meets certain criteria, such as domestic production, you can receive up to $7,500.

This is a subsidy under the Biden administration's Inflation Reduction Act (IRA).

However, President-elect Trump, who has been negative about climate change, has declared that he will eliminate this subsidy.

[Donald Trump/U.S. President-elect/July: "Day one of the Trump administration, I will terminate Kamala's insane electric vehicle mandate. And we will end the green news scam once and for all."]

Meanwhile, Reuters reported that Trump's transition team, which includes founders of oil and gas companies, is actually pushing for the abolition of electric vehicle subsidies.

In addition to distrust in the policy itself, the aim is to secure funding in preparation for tax cuts amounting to trillions of dollars.

If the abolition is realized, the electric vehicle and battery industries will inevitably be hit.

In fact, following the report, Tesla's stock price fell by more than 5%, and electric vehicle stocks showed a general decline.

However, Tesla CEO Elon Musk supports the abolition of subsidies.

For Tesla, which makes profits from electric vehicle sales, the abolition of subsidies is calculated to be more advantageous in competition with other companies.

Additionally, with the Trump administration's deregulation on autonomous driving, Tesla could see greater benefits.

[Dan Ives/Managing Director of Technical Analysis at Wedbush Securities/CNBC: "But really, it's more about that software penetration within Tesla from an FSD perspective, it changes the whole business model."]

However, since electric vehicle-related companies are concentrated in areas with strong Republican support or battleground states, it remains uncertain how the abolition of subsidies will be concretized.

South Korea's Ministry of Trade, Industry and Energy also stated that it is still an undecided matter and that they will consult with the U.S. side.

This is Park Il-jung from KBS News in New York.