Jim Cramer's 'Trump Discount' Proves Real—As ESG Bets Turn Toxic

The clean energy trade that once looked bulletproof is now melting under the weight of President Donald Trump's climate rollbacks—and Jim Cramer's infamous "Trump discount" is playing out in real time.

Track the performance of the clean-energy tracking iShares Global Clean Energy ETF here.

The ESG Trade Just Got De-Rated—Hard

Jim Cramer warned months ago that markets were quietly applying a "Trump discount" to ESG stocks. Now, that thesis is showing up in black and white—on research notes and in fund flows.

JPMorgan's Bill Peterson says the EV downturn is far from priced in. June U.S. sales of electric and plug-in hybrid vehicles fell nearly 9%, even as inventories ballooned and incentives were jacked up to move metal. And with the Trump administration’s “Big Beautiful Bill” proposing to reverse key EV tax credits and reimpose tariffs on Chinese EVs and battery components, Peterson warns of "added uncertainty" and a prolonged margin squeeze.

Read Also: Every Time Musk Ships A Tesla, These EV Sidekicks Quietly Profit

It's Not Just Cars. It's The Whole Clean-Tech Complex

The implications go well beyond Tesla. The JPMorgan note also highlights eVTOL names, Joby Aviation Inc (NYSE:JOBY) and Archer Aviation Inc (NYSE:ACHR)—once hailed as the next great green mobility play—as particularly exposed.

Many in the sector are pre-revenue, deeply capital-intensive, and entirely reliant on government support and regulatory tailwinds that could vanish under the Trump administration.

The broader theme? ESG has lost its political immunity. And investors are waking up to the risk that the "E" in ESG no longer guarantees a premium multiple—it might now command a discount.

High-Growth ESG Names Could Hit A Wall

JPMorgan is urging caution on some of the market's flashiest ESG-adjacent names. Enovix Corp (NASDAQ:ENVX), a battery maker once buoyed by risk-on sentiment, just got a downgrade—not because of execution failure, but because the stock has raced ahead of realistic earnings potential. Even bullish forecasts that include multi-million-unit contracts and full capacity by 2028 are, in JPM's view, already priced in.

Tesla, while better capitalized, is no longer immune—Trump's return has dimmed the policy tailwinds that once boosted clean tech multiples. Even Fortescue Ltd (OTCPK:FSUMF), a major green hydrogen backer, now looks like a stranded asset play in a world where regulatory incentives are vanishing fast.

The message? In a market now ruled by fiscal hawkishness and a deregulatory White House, overfunded "future plays" are rapidly losing altitude.

Cramer's "Trump discount" may have started as a quip, but it's fast becoming a valuation framework. And for ESG bulls, that's the most toxic narrative of all.

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