A Donald Trump presidency and possible strike down of the Inflation Reduction Act (IRA) would be "devastating" for Tesla Inc.'s (NASDAQ:TSLA) competitors, company CEO Elon Musk said during the company's second-quarter earnings call.

What Happened: Musk acknowledged that a Trump Presidency and possible strike down of the EV subsidies and tax credits put forth by IRA will have some impact on the EV industry. The impact would be slight for Tesla and devastating for its competitors, Musk said.

"But long term probably actually helps Tesla, would be my guess, yes," Musk said, while adding that the company is relying on vehicle autonomy to boost value. A possible repeal of the IRA and tax credits on the purchase of EVs, Musk said, is not related to autonomy.

The CEO also said that the company is postponing plans for a gigafactory in Mexico due to concerns about potential heavy tariffs on vehicles produced in the neighboring country if Trump is re-elected.

"Trump has said that he will put heavy tariffs on vehicles produced in Mexico. So it doesn't make sense to invest a lot in Mexico if that is going to be the case," Musk said. "So we kind of need to see where the things play out politically."

Why It's Important: Even as Musk has officially endorsed the Republican presidential nominee, Trump, analysts are divided about the implications of a Trump presidency for the EV maker.

Tesla bull Dan Ives previously said that a second term for Trump would be an overall negative for the EV industry, given the likelihood of the EV rebates/tax incentives getting pulled. But it is a potential positive for Tesla, given the company "has the scale and scope that is unmatched in the EV industry and this dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment," he said.

In a speech at the Republic National Convention in Milwaukee last week, Trump said that he would end the electric vehicle "mandate" on day one, referring to the Biden administration's push for a majority of new passenger cars and light trucks sold in the United States to be all-electric or hybrids by 2032.

Musk, however, has previously talked about sharing a good relationship with Trump.

"I have had some conversations with him and he does call me out of the blue, for no reason. I don't know why, but he does. And it's like, he's very nice when he calls," Musk said at the company's annual shareholder meeting in June. The CEO also added that Trump is a huge fan of the company's Cybertruck.

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