Tesla Inc TSLA CEO Elon Musk on Tuesday voiced against subsidies including a federal EV tax credit of $7,500 for which several of its vehicles are eligible.
What Happened: “Take away the subsidies. It will only help Tesla,” Musk said in response to a Tesla enthusiast who opined that subsidies benefit unprofitable EV makers more than they help Tesla. On the other hand, the EV tax credit is harming the profitability of the industry, the enthusiast said.
Musk’s comment comes on the heels of his support for Republican Donald Trump in the upcoming presidential election and also for Senator JD Vance who Trump picked as his vice-presidential running mate. Republicans have often voiced criticism for the Biden administration’s support and push for EVs including EV subsidies aimed at bringing down the cost of electric vehicles.
Vance last year even proposed the Drive American Act aimed at eliminating EV subsidies and replacing them with up to $7,500 credit for new gas or diesel-powered vehicles, including hybrids, made in America.
Why It Matters: Although Musk has dismissed subsidies, Tesla has received them in the past including a $465 million federal loan in 2010.
In April 2023, Musk said that Tesla’s competitive position would improve if all subsidies ended. “Our competitors require subsidies, not us. That said, if competitors get subsidies, Tesla should get them too,” the CEO then said.
Several cars on Tesla’s vehicle lineup are currently eligible for a federal EV tax credit of $7,500 including all variants of Tesla’s Model Y SUV, three out of four variants of Model 3, and the all-wheel drive version of the Model X.
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