Has Elon Musk Made A U-Flip On The US EV Tax Credit score? Is The US Conserving It?

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Throughout the 2024 US  presidential marketing campaign, Donald Trump repeatedly attacked electrical automobiles and Joe Biden’s EV insurance policies, together with the US EV tax credit score (which was first handed underneath George W. Bush, however which was up to date and strengthened underneath Joe Biden — and which revived tax credit for Tesla underneath Biden).

As a part of Donald Trump’s govt actions on Day 1 in workplace, we bought: “[…] by contemplating the elimination of unfair subsidies and different ill-conceived government-imposed market distortions that favor EVs over different applied sciences and successfully mandate their buy by people, non-public companies, and authorities entities alike by rendering different varieties of automobiles unaffordable.” That was amidst a number of different statements in opposition to any EV-supportive insurance policies.

Notably, in the course of the marketing campaign seasons, Elon Musk additionally mentioned he was in opposition to ending all subsidies, and he mentioned that whereas shedding the EV tax credit score would successfully make Tesla automobiles dearer for customers, it might harm Tesla’s rivals extra, which might most likely assist Tesla in the long run. It’s by no means been a compelling argument, particularly because the vehicles the subsidies are serving to to compete with are largely fossil fueled vehicles, and people vehicles get extra assist if the subsidy is eliminated. Additionally, the concept fossil gasoline subsidies can be eliminated and it might be an excellent taking part in discipline was all the time absurd and unrealistic.

There was by no means any dialogue or remark indicating that Musk would attempt to get Trump to retain the patron EV tax credit score. Additionally, let’s make clear that this may must be executed by Congress as an entire, not simply an govt order from Donald Trump. It was enacted by Congress and must be repealed by Congress.

Effectively, in Tesla’s shareholder letter yesterday, we appear to get indication the EV tax credit score is right here to remain — or, no less than, Tesla hopes it’s.

For one, Tesla particularly wrote this in an vital part of the shareholder letter: “We anticipate Cybertruck to be eligible for the IRA shopper tax credit score, serving to to enhance affordability and entry for much more prospects.” Why would the corporate write that if the tax credit score was about to be axed? Additionally, let’s simply be clear — “IRA” there refers back to the Inflation Discount Act signed into regulation by Joe Biden. The signifies they’re referring to present regulation, however possibly it additionally means Tesla is protecting its bases if the IRA is repealed?

Additionally, down in a bit highlighting the brand new Tesla Mannequin Y (web page 18), Tesla exhibits pricing minus incentives and anticipated fuel financial savings. Within the nice print, Tesla writes, “Estimated financial savings consists of $6,000 in fuel financial savings estimated over 5 years and the $7,500 Federal Tax Credit score, obtainable to eligible consumers and topic to MSRP caps.” Once more, that assumes (fairly prominently) that the EV tax credit score stays.

These are good indicators for the EV tax credit score, I presume. Until it’s simply Tesla attempting to make pricing look higher within the second, even when Musk is aware of the tax credit score is on the chopping block. However, then, one would presume that this may not be put in the principle physique of the letter “We anticipate Cybertruck to be eligible for the IRA shopper tax credit score, serving to to enhance affordability and entry for much more prospects.” Proper?

As I’ve mentioned for months, repealing the EV tax credit score would harm Tesla — badly. Former Tesla execs and workers have mentioned the identical. Present Tesla gross sales workers would inform you a similar. Elon Musk claimed in any other case on the marketing campaign path, inviting repeal of the tex credit score, and Trump has had a transparent vendetta in opposition to electrical automobiles (which I’m positive his oil buddies are additionally not a fan of). What can we anticipate now on this entrance?