EV Tax Credits Are Ending—Here's Why These 2 Stocks Could Soar

The impending expiration of U.S. electric vehicle (EV) tax credits in September, enacted by the "One Big Beautiful Bill," is poised to reshape the market, potentially benefiting specific pure-play manufacturers like VinFast Auto (VFS) and Lucid Group (LCID). VinFast, previously ineligible for credits, now faces a more level competitive landscape in the U.S., a key growth market despite its current -35% gross margin and 296% EV delivery growth last quarter. Similarly, Lucid may see reduced competition from traditional automakers, although still unprofitable, with Q2 deliveries up 38% year-over-year; analysts project significant upside for both companies, emphasizing that U.S. market success is crucial for their long-term profitability and scale.

Analysis

The impending expiration of U.S. electric vehicle tax credits in September is poised to restructure the competitive landscape, creating a nuanced outlook for pure-play EV manufacturers VinFast Auto (VFS) and Lucid Group (LCID). For VinFast, the policy change is a distinct positive, as its vehicles were previously ineligible, thereby leveling the competitive field in a key growth market where it currently derives only 6.2% of its revenue. This strategic advantage is coupled with formidable operational momentum, evidenced by a 296% spike in EV deliveries last quarter and an improving, albeit still deeply negative, gross margin of -35%. For Lucid, which generates 73% of its sales in the U.S., the situation is more speculative; the bull case hinges on the thesis that legacy automakers may deprioritize their EV programs without subsidies, thus reducing competition. While Lucid's vehicle deliveries grew a solid 38% year-over-year in Q2, both companies remain highly unprofitable and their long-term success is contingent on achieving economies of scale, for which success in the U.S. market is paramount.

Key Decisions for Investors

• Investors should view VFS and LCID as speculative, high-growth opportunities whose potential upside is directly linked to the shifting U.S. competitive dynamics post-tax credit expiration.
• Consider that the policy change provides a more direct tailwind for VinFast by removing a prior disadvantage, whereas the benefit to Lucid is indirect and depends on the unproven reaction of legacy competitors.
• Closely monitor both companies' quarterly reports for progress on improving gross margins and scaling production, as significant unprofitability remains the primary risk despite strong delivery growth.
• Watch for strategic announcements from traditional automakers like Ford post-September to validate the thesis that they will de-emphasize their EV efforts, as this is a key pillar of the bull case for Lucid.