Tesla may experience a substantial financial impact if President Donald Trump's "Big Beautiful Bill" becomes law. The proposed legislation threatens to eliminate key incentives that have bolstered Tesla's business model.

The bill aims to phase out the clean vehicle tax credit, which currently allows buyers of new electric vehicles to claim up to $7,500. This credit has been a significant driver of EV adoption and Tesla's sales. Under the proposed changes, automakers who have sold over 200,000 qualifying EVs between late 2009 and 2025 would no longer be eligible for the credit. Tesla, having delivered over 336,000 vehicles in Q1 2025 alone, would clearly fall into this category.

Analysts predict the removal of this tax credit could severely impact Tesla's bottom line. JPMorgan estimates it could result in a $1.2 billion headwind, representing about 19% of Tesla's 2024 earnings before interest and tax. The removal of California Air Resources Board (CARB) zero-emission vehicle credits could create an additional $2 billion headwind.

Beyond the EV tax credits, the bill also threatens Tesla's growing energy business by ending energy tax credits. Tesla Energy, which includes products like the Megapack and Powerwall battery systems, saw a 67% year-over-year increase in Q1 2025, bringing in $2.73 billion. The company has stated that abruptly ending these credits would "threaten America's energy independence and the reliability of our grid."

While Tesla CEO Elon Musk has criticized the bill, calling it a "disgusting abomination," the potential impacts on his company are clear. The proposed changes could accelerate Tesla's transition towards AI and robotics, areas where Musk sees significant future value. However, analysts note that any material benefits from autonomous robotaxi services are likely years away, while the impacts of subsidy removals could hit as soon as 2025.

The broader implications of this bill extend beyond Tesla to the entire EV and renewable energy sectors. As the U.S. grapples with balancing economic interests and environmental goals, the outcome of this legislation could significantly shape the future of clean energy adoption and innovation in America.