Tag: Trump Administration

  • Nvidia Projects $5.5 Billion Loss from US Chip Export Restrictions

    Nvidia Projects $5.5 Billion Loss from US Chip Export Restrictions

    Key Takeaways

    1. Nvidia warns that new Trump administration measures could reduce its revenue by $5.5 billion due to H20 chip export restrictions to China.
    2. The company’s first quarter earnings may include $5.5 billion in charges linked to H20 products, affecting inventory and purchase agreements.
    3. Nvidia needs a license to sell the H20 chip to China for the indefinite future, as it was previously designed for export.
    4. Concerns arise over the potential use of the H20 chip in Chinese AI technologies, particularly with the introduction of the DeepSeek language model.
    5. The Trump administration is investigating trade policies, including tariffs on semiconductor imports, following existing restrictions on chip exports to China since October 2022.

    In a recent regulatory announcement made on Tuesday, Nvidia has cautioned that new measures from the Trump administration, which may restrict exports of the H20 chip to China, could potentially reduce the company’s revenue by as much as $5.5 billion.

    Financial Impacts of H20 Chip

    Nvidia stated that its first quarter earnings might reflect up to about $5.5 billion in charges related to H20 products, which include costs linked to inventory, purchase agreements, and associated reserves.

    The filing noted that the Government has informed Nvidia it will need a license to sell this chip “for the indefinite future.” This chip was the most powerful one Nvidia had available for China and was already undergoing scrutiny by the White House, which was likely to ban its exports. The company had specifically designed and produced this chip with the intention of exporting it to China, as it adhered to current regulations.

    Concerns Over Chinese AI Development

    These new restrictions follow the introduction of the Chinese language model, DeepSeek, which posed a challenge to American models and raised alarms within the Government regarding the chip’s potential use in fueling such technologies.

    The report mentioned that the Government believes “the covered products may be used in, or diverted to, a supercomputer in China.” This action could significantly affect Nvidia’s financial performance, estimating a $5.5 billion impact for the quarter ending on April 27th.

    Ongoing Investigations into Trade Policies

    In recent days, the Trump administration has also initiated investigations into the pharmaceutical and semiconductor sectors to assess whether additional tariffs on imports are necessary. Since October 2022, the United States has enacted restrictions on chip exports to China, which have intensified in recent days under the Trump administration.

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  • 2025 Model Y Juniper May Lose Tax Credit Due to Trump Order

    2025 Model Y Juniper May Lose Tax Credit Due to Trump Order

    Speaking during his inauguration, President Trump stated his administration will end the “EV mandate,” confirming earlier speculations.

    When he later signed the “Unleashing American Energy” executive order, it became evident that this could lead to an instant halt of the EV tax credit payments outlined in Biden’s Inflation Reduction Act (IRA).

    Executive Order Details

    Trump’s executive order discusses abolishing the EV mandate to create a fair competition between electric and gasoline vehicles. In Section 2 of the “Unleashing American Energy” executive order, it defines the energy policies that US government agencies must follow, including a part that addresses electric vehicles:

    To abolish the “electric vehicle (EV) mandate” and enhance real consumer choice, which is vital for economic progress and innovation, by removing barriers to vehicle access; by assuring a uniform regulatory environment for vehicle choices; by ending, where suitable, state emissions waivers that restrict the sale of gasoline vehicles; and by evaluating the removal of biased subsidies and other flawed government-imposed market disruptions that favor EVs over alternative technologies, effectively forcing individuals, businesses, and government bodies to purchase them by making other vehicle types too expensive.

    Implications for EV Subsidies

    By merely stating that agencies should “consider” ending electric vehicle subsidies, it appears the current tax credit program might continue for now. However, in Section 7, titled “Terminating the Green New Deal,” Trump’s executive order clearly states that “all agencies shall immediately pause the disbursement of funds appropriated through the Inflation Reduction Act… including but not limited to funds for electric vehicle charging stations.”

    It grants agency leaders 90 days to review the IRA program and suggest whether it aligns with the new energy policies of the Trump administration or if it should be cut. “No funds identified in this subsection shall be disbursed by a given agency until the Director of OMB and Assistant to the President for Economic Policy have determined that such disbursements are consistent with any review recommendations they have chosen to adopt,” the order emphasizes.

    Future of EV Makers

    Since the IRA was signed into law, it can’t be simply overturned by an executive order, meaning that any changes may still require a vote. However, the call for an immediate freeze on IRA-related payments could signal trouble for Tesla and other electric vehicle manufacturers.

    For example, the 2025 Model Y orders in the US are anticipated to open this week. Even if Tesla continues to honor the tax credit rebate for early buyers of the updated model, it might lack access to the reimbursement funds, forcing it to decide if it will absorb the costs.

    The 2025 Model Y Juniper is expected to be released in the US around March, similar to its launch in China and Europe. By the time potential buyers check out the reviews on the EPA range estimates after the first Juniper refresh, the tax credit might no longer be available.

    Impact on Charging Infrastructure

    The Trump administration is also eliminating subsidies for electric vehicle charging infrastructure, which could impede the pace of EV adoption in the US. Although the executive order reduces barriers to mining and refining materials for EV batteries domestically, Tesla may still qualify for subsidies for its lithium refinery or the 4680 battery that is likely to be used in the Model Y Juniper in the US.

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