I don’t think there’s much chance of that happening. All the big automakers are lobbying to keep the EV tax credits – it’s too hard for them to plan if the Gov’t keeps switching back and forth between whoring for oil & gas or clean energy. {{ LOL }}
intercst
I was thinking that would only really help high earners, but then I looked at California income tax rates. 
With $80K of income it would wipe out your income tax bill.
DB2
What math are you using?
If I grabbed the right info, here is what you pay based on AGI (i.e. after standard deductions).
So, maybe closer to $120K to owe $7500?
Married couples pay less than that, of course.
Mike
They’ll probably make it a refundable tax credit applied at time of sale, that even poor people would benefit from.
intercst
The proposal plans on excluding Tesla.
Tesla is the only company manufacturing cars in CA.
The automakers cry a river…then TFG reminds them “The protectionist tariffs will give you cover to raise the prices on your ICE models so much, you will recover your stranded investment in EVs, and a lot more. Feel better now?”
Steve
They probably can’t afford it if they include Tesla. $7.5K a car over half a million cars is several billion dollars a year - and that’s assuming that adoption doesn’t grow. Even for a budget the size of California’s, that’s not a small bill…
They will be hurting Tesla CA employees who are their primary constituents, voters and tax payers.
The proposal will favor giving subsidies to foreign and US automakers in other states.
True. If they follow that proposal, it would put Tesla cars at a subsidy disadvantage against other cars. But that doesn’t mean it won’t happen.
It is dumb public policy to take money from your blue collar tax payers and give it to foreign automakers. It will not happen.
Plenty of dumb public policy happens. The EV credit itself isn’t exactly smart public policy - it’s an insanely expensive way of reducing emissions. So there’s no reason this policy might not get implemented. And I’m sure that California wouldn’t mind pushing Tesla’s nose in a bit after they decamped their HQ to Texas.
It might not, of course - even with an exception locking out Tesla, it’s very expensive. But don’t rule it out just 'cause it’s not great policy.
Again, though, the purpose of these subsidies isn’t a job creation program. They’re to incentivize automakers to develop EV’s.
Tesla is on record saying it doesn’t need subsidies. Other automakers do still need subsidies. If Tesla’s are included in the subsidy, most (if not nearly all) of the subsidy will be “wasted” - public funds expended on cars that would have been made and sold anyway. For other automakers, though, more of the subsidies will serve their purpose - to incentivize the development and production of vehicles that wouldn’t otherwise be made or sold.
It will be interesting to see what happens.
Just because Musk is on record saying that doesn’t mean that the subsidy would have no impact on Tesla sales.
Rear guard PR action to prop up the stock price? He is kissy face with an openly EV-hostile regime. The obvious takeaway is he is working another agenda.
Steve
Nothing will happen. It is a dumb idea.
True - but it also means that losing the subsidy is unlikely to force Tesla to stop making cars.
From what I can gather, the proposal under consideration is similar to the original structure of the tax credits. A subsidy for the first “X” amount of units produced, so that automakers received help during the initial start-up/phase-in of converting models to electric powertrains. But then once the product (or new automaker) is established, the subsidies are no longer necessary to the survival of the product.
Since Tesla is selling several hundreds of thousands of BEV’s in California already, it’s unlikely they would ever qualify for this new subsidy. It’s also unlikely that other automakers that do qualify for it would be producing in enough volume for the subsidy itself to materially affect Tesla sales. We are likely to find out how much the loss of the federal tax credit actually does affect overall BEV sales across the country.
Newsome will most likely be out.
Seems pretty unlikely - his term runs until 2026.
Pretty sure we can look to Germany for some clues. And Sweden. And New Zealand.
Germany: -37%
Sweden: -15%
New Zealand: -12%
Musk says such a retraction would hurt all EV makers including Tesla, but would hurt Tesla less and could “eventually be good.”He apparently thinks that would squeeze some of the players out and leave a bigger piece for Tesla but I’m not so sure. Maybe one or two upstarts would fold but the established makers can’t afford not to be in the game. Same reason the networks ended up owning cable channels; they couldn’t afford not to and be left behind in a multichannel world.
Yes, Tesla has some margin to give to compete on pricing, but the others aren’t in a pricing war yet, they’re in the capital heavy startup phase so it (almost) doesn’t matter. If they announce they’re leaving the segment their stock will be destroyed. If they stay and take the hit their stock will slump but will bounce.
Meanwhile Newsome’s gambit is clever: “We’re not discriminating against Tesla, we’re just trying to help manufacturers with lower market share get up and running. So sorry if it only impacts you, Elon. Then again you’ve left for Texas, so bye.”
