The GOP tax bill kills a $7,500 electric-vehicle credit - and that's terrible news for Tesla
Tesla
- The GOP tax bill reportedly eliminates a $7,500 federal electric-vehicle tax credit.
- The credit would go away immediately, not be phased out.
- The credit has been seen as a major driver of EV sales.
The just-unveiled Republican tax bill will eliminate a $7,500 federal tax credit for electric vehicles.
"The tax credits ... are capped for each car manufacturer at 200,000 units, a limit no automaker has reached thus far," Bloomberg's Craig Trudell wrote Thursday. "Tesla sold about 127,000 Model S sedans and Model X sport utility vehicles through August, according to researcher IHS Markit."
The report indicated that the tax credit would be dropped immediately.
Tesla shares were already plummeting on Thursday after a dismal earnings report for the third-quarter on Wednesday, so the news on the tax bill didn't help. Shares fell 8% to $296 in morning trading.
Hollis Johnson
Tesla includes the tax credit in pricing calculations for new vehicles on its website, enabling customers to compare the total vehicle cost with and without the federal tax break. (The credit can only be claimed if a customer owes money to the IRS.)
The GOP bill doesn't affect various state tax breaks and incentives that apply to electric cars.
General Motors would also face the loss of the tax credit on its Chevy Bolt, an all-electric vehicle that launched in late 2016, and that has sold in far lower volumes so far than Tesla's cars.
With so few EVs sold annually, the boost to federal revenue if the credit goes away would be marginal. However, the tax break has been seen as a major driver for EV sales.
Get the latest Tesla stock price here.
- I spent 2 weeks in India. A highlight was visiting a small mountain town so beautiful it didn't seem real.
- I quit McKinsey after 1.5 years. I was making over $200k but my mental health was shattered.
- Some Tesla factory workers realized they were laid off when security scanned their badges and sent them back on shuttles, sources say
- 8 Lesser-known places to visit near Nainital
- World Liver Day 2024: 10 Foods that are necessary for a healthy liver
- Essential tips for effortlessly renewing your bike insurance policy in 2024
- Indian Railways to break record with 9,111 trips to meet travel demand this summer, nearly 3,000 more than in 2023
- India's exports to China, UAE, Russia, Singapore rose in 2023-24