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I took a tour through a few 10Q reports this week to get a sense of how EV makers like Rivian and Lucid (or even legacy automakers that also sell EVs) feel about the one-two punch of tariffs and the end of the federal tax credit. Although these documents are loaded with legalese, it’s clear that both economic developments are on the minds of their respective executive teams.
Rivian and Lucid both make specific and multiple mentions of the One Big Beautiful Bill Act (OBBBA) in the risk factors section of their 10Qs. The OBBBA eliminates certain tax credits for EV buyers and essentially devalues the zero-emissions regulatory credit market. Tariffs and trade policy risks also make cameos.
Lucid notes in its 10Q that it is assessing the impact of OBBBA. “If any of the Company’s suppliers, sub-suppliers or partners experience financial distress, insolvency or disruptions in operations, they may be unable to fulfill their obligations or meet the Company’s production and quality requirements.” Meanwhile, Rivian tries to strike a “glass half full” tone by noting that 45X tax credit for domestic battery production remains.
Ford and GM also make mention of the OBBBA, although both spend more time talking about the potential effects of tariffs. GM says it’s unable to estimate the financial impacts of the OBBBA, but notes it “could be material and may adversely affect electric vehicle profitability.”
Here’s the unfortunate upshot (and potential third punch): A new 100% import tariff on semiconductor chips could squeeze automakers even more. Anyone who paid attention during the COVID pandemic remembers how supply constraints on chips hurt automakers. Industry experts estimate that a modern vehicle contains more than 1,000 — and in some cases …