U.S. EV tax credit ending will be a long-term win for Tesla, says Deepwater's Gene Munster

Core Insights - The removal of the tax credit has led traditional automakers to reduce their investment in electric vehicles (EVs), which may hinder their ability to compete with Tesla in the long run [4][5] - Tesla's Full Self-Driving (FSD) technology is gaining traction among consumers, providing a competitive edge over traditional automakers who are struggling with profitability in EV production [3][7] - The automotive industry is at a critical juncture where the ability to scale EV production and achieve technological advancements in autonomy will determine future success [8][10] Industry Impact - Traditional automakers like GM, Ford, and Volkswagen have announced cuts in EV factory output and model offerings, estimating a reduction of 20% to 30% in recent months [4] - The shift in consumer demand towards cheaper EVs, driven by the tax credit's removal, has resulted in a pull-forward in demand, with approximately 40,000 of the expected 75,000 to 80,000 deliveries attributed to this factor [2] - The profitability of EV production is a significant concern, with traditional automakers reportedly losing tens of thousands of dollars per vehicle, while Tesla is managing to produce vehicles profitably [7] Technological Advancements - Tesla's FSD technology is perceived as a major advantage, with users experiencing a near hands-free driving experience, although it is not yet fully autonomous [6] - The regulatory landscape requires FSD to achieve a high level of accuracy (99.999%) before widespread approval, indicating that significant technological milestones are still needed [8] - The competition in the autonomous driving space is narrowing down to Tesla and Waymo, with Tesla facing challenges in its robo-taxi initiatives due to more frequent interventions than anticipated [9]