Elon Musk May Need to Recalculate His Opinion on EV Tax Credit Repeal

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On the marketing campaign path final 12 months, requested about US EV subsidies, Elon Musk stated that he was against all subsidies and can be proud of each EV and fossil gasoline subsidies being eliminated. In fact, Republicans accountable for all the things should not going to take away fossil gasoline subsidies — not even a tiny iota of an opportunity. Musk squirmed sooner or later into saying that it might harm Tesla just a little within the quick time period to lose the US EV tax credit score, however may presumably assist in the long run by eliminating much less aggressive opponents.

Let’s maybe skip over the truth that fossil gasoline automobiles are the opponents, and Tesla’s entire mission was initially to push different automakers to impress sooner. (Making the argument that different automakers can have an excellent tougher time promoting EVs and thus fail doesn’t jibe with Tesla’s mission in any respect.) Different Tesla execs and former execs have been clear that eradicating the US EV tax credit will certainly harm Tesla. However let’s get into Musk’s argument just a little bit.

For Musk’s argument to work, Tesla would wish to have robust shopper demand and robust gross margins. Nonetheless, Tesla gross sales have declined whereas the general EV market has grown. As simply reported, in California, the place Tesla accounts for almost all of EV gross sales, Tesla’s sales dropped almost 12% in 2024 whereas total EV gross sales rose. Not less than 18 auto manufacturers had their EV gross sales enhance. Tesla is struggling to stabilize its gross sales, to not point out develop once more, whereas different automakers are rising easily.

Yesterday, we revealed an evaluation on how much lower US EV sales may sales may be in the coming years if the US EV tax credit is removed. The venture places a virtually 3 million car hole between an anticipated ~4.2 million EV gross sales in 2030 with out the tax credit score to an anticipated ~7 million EV gross sales in 2030 with it. If that projection is anyplace near correct, how would that not massively harm Tesla?

Maybe Elon Musk by no means ran any numbers, by no means did any actual evaluation, and simply stated what he thought he ought to say to assist Donald Trump’s marketing campaign for the White Home. It wouldn’t be the primary time Trump or his associates deceived folks whereas campaigning. But when Musk did make any type of evaluation or calculations on this matter, maybe after seeing gross sales drop, drop, drop, he ought to rethink the impression to Tesla if the EV tax credit score is repealed.