Well yeah. That's the entire point of tax incentives and all that. We want them to do something so we make it in their financial best interest for it to happen.

In this case, we made it so their interests were best served by spending an ass load of money on research and development to make EVs more broadly producible. If you yoink the rule that made them do that away, it's not that they've wasted or lost that investment, but producers who weren't bound by those rules are at a comparative advantage because they weren't set back by the rules, and now they can continue to sell cheaper, dirtier cars for less than the bigger companies can sell clean or dirty cars.

It's to the advantage of Tesla because reducing the sales of electric vehicles while there's rising consumer demand makes it easier for them to sell cars at the same price with less competition.
It's worse for the environment but "giving a shit about the planet" isn't on the table in the current political environment. The most we can hope for is "the interests of a large company are tangentially aligned with those of the environment for once" and just run with it.