Musk Is Opposed To Biden Administration’s Proposed EV Tax Credits

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In his Daily Market Notes report to investors, while commenting on EV tax credits, Louis Navellier wrote:

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Q3 2021 hedge fund letters, conferences and more

Just Another Flu?

Two steps forward, one step back. The world markets, after the biggest weekly rise in over 10 months, have stalled for today as the uncertainties about how Covid will play out given new restrictions being implemented in the UK.

Notably, on the homefront, Jefferies had to postpone their back-to-office policy after a major outbreak of infections. Expect volatility and skittish markets until more is known about the latest variant. 

Retail investors do not seem to be fazed by the news though. Our survey this week showed that 96% of respondents are optimistic about the possibility of a year-end rally, believing that the Omicron variant is "just another flu."


Rate Hike in 2022

Notwithstanding the more influential sentiment in the market is being shaped by the property sector in China and technical defaults there, inflation, and unemployment figures which may trigger a rate hike sooner than the Fed has indicated to date. 

Longer-term, the economy continues to be in fine shape, with profit margins rising for three quarters in a row and are forecast to rise further in 2022, which should allow stocks to deal well with moderate inflation. Expect further good news on the Omicron front to propel the market to new highs into year-end on optimism for 2022.

The Labor Department reported on Thursday that weekly claims for unemployment declined to 184,000 in the latest week. Continuing unemployment claims rose slightly to 1.992 million.  Weekly unemployment claims are now running at the lowest rate in 52 years, so the Fed should pivot away from its unemployment mandate and shift to its inflation mandate.

EV Tax Credits

The fact that the Biden Administration is only promoting less efficient EVs made by union-made EVs is raising questions about whether or not the U.S. is truly serious about making a successful transition to EVs since Lucid Group Inc (NASDAQ:LCID), Rivian Automotive Inc (NASDAQ:RIVN), and Tesla Inc (NASDAQ:TSLA) have not been included in any of the Biden Administration’s attempt to boost EVs.  Ironically, Elon Musk told The Wall Street Journal that he is opposed to the Biden Administration’s proposed EV tax credits (that provide a bigger tax deduction on union-made EVs) as well as federal funding for EV charging stations.  Musk said, “Honestly, I would just can this whole bill.”

Interestingly, Transportation Secretary Pete Buttigieg responded to Elon Musk's comments and said “I think it’s very important to fund EV charging stations and to also make sure what’s in the next Build Back Better Act to bring down the cost of electric vehicles.  Let me explain why.  The market is going electric already.  That’s gonna happen.  The automotive sector is headed that way.  We’re not here to cause that technological adoption to happen.  We’re here because there are three things that will not happen on their own.”

Buttigieg also reiterated that the Biden Administration believes in “the benefits of union jobs” and added that an EV credit of up to $12,500 could help buyers get into an electric car that they wouldn’t be able to afford without the $12,500 EV credit.  Finally, Buttigieg stressed the importance of the EV revolution being “made in America and creating good-paying jobs.”  

Coffee Beans

Florida police extracted a 5-foot snake, a red-tailed boa constrictor - sometimes deadly - found lurking inside a resident's couch. The couch was bought by the resident only a couple of days before the incident, making him think the snake was hiding in the couch when it came to his house. Source: UPI