From Investing.com: 2024-11-23 04:30:00

Bernstein analysts warn of potential downside risks to electrical infrastructure stocks if Trump repeals the $7,500 EV tax credit. Immediate market reaction caused low single-digit declines in stocks like Eaton, Hubbell, and Quanta Services. Removing the tax credit could reduce electricity demand growth from 0.6% to 0.4% over the next five years.

Germany’s rollback of EV subsidies in 2023 led to a 30% drop in demand year-to-date in 2024. Bernstein estimates that eliminating tax credits could have a similar impact on EV demand. Lower electricity demand would moderately trim long-term earnings growth for electrical infrastructure companies like ETN, HUBB, and PWR.

Despite potential risks, Bernstein believes the market has already priced in much of the downside. Stock declines of 2% (ETN), 3% (HUBB), and 1% (PWR) following the news suggest that investors have factored in the potential headwind. The firm concludes, “This risk is largely priced in.”



Read more at Investing.com: Downside risks if Trump repeals EV tax credit By Investing.com