Topline
Elon Musk said Thursday he supports eliminating a $7,500 tax credit for electric vehicle buyers, reiterating a position he expressed in July that could help Tesla—as Trump’s transition team is reportedly mulling the prospect despite pushback from most in the auto industry.
Elon Musk with his son, and Vivek Ramaswamy make their way to a meeting in the Capitol Visitor … [+] Center with House and Senate Republicans to talk about President-elect Donald Trump’s “Department of Government Efficiency,” on Thursday, December 5, 2024. (Tom Williams/CQ-Roll Call, Inc via Getty Images)
Key Facts
Musk said “I think we should get rid of all credits” when asked Thursday by a reporter on Capitol Hill if he supports getting rid of the electric vehicle tax credit, Politico reported.
Musk made a similar statement in July, writing “take away the subsidies. It will only help Tesla,” in a post on X, formerly known as Twitter.
Eliminating the tax credit could potentially hurt other EV manufacturers more than it would Tesla, the largest global EV producer, and lead to decreased competition for the company, causing a potential dip in demand that could prompt other EV manufacturers to reduce production, according to experts.
Trump campaigned on ending Biden’s “EV mandate”—though he did not specifically target the tax credit, his transition team is reportedly planning to eliminate it, Reuters reported last month, citing unnamed sources.
Chief Critic
The Alliance for Automotive Innovation, which represents all major global automakers, but not Tesla, urged Congress in an October letter to keep the tax credit in place, citing concerns about increased competition from Chinese manufacturers, CNN reported. The group also wrote a letter in November to Trump’s transition team urging his administration to keep the tax credit in place, Reuters reported.
Key Background
Musk made the comment while he was on Capitol Hill on Thursday to meet with lawmakers about plans for the Department of Government Efficiency, a newly created advisory board Trump tapped him and Vivek Ramaswamy to lead to cut government spending. The EV tax credit applies to the purchase of new electric vehicles and was implemented as part of Biden’s signature Inflation Reduction Act, which also provides a tax credit of up to $4,000 for used EV purchases. The Biden administration reported in July the tax credit has contributed to a 20% dip in prices for EVs compared to a year prior. The administration also issued new regulations in March aiming to increase the share of EVs sold in the U.S. from 7.6% of all car sales to 56%, designed to further Biden’s push to cut greenhouse gas emissions in half by the end of the decade.
Tangent
California Gov. Gavin Newsom announced plans last month to reinstate a $7,500 state tax credit for EV buyers if Trump eliminates the federal one, though the plan could omit Tesla, Bloomberg and The New York Times reported. Musk reacted to the Bloomberg report by calling the proposal “insane” in a social media post.
Further Reading
‘This Is Insane’: Musk Blasts California For Possibly Icing Tesla From EV Credit Program (Forbes)
Tesla Stock Rises 6%: What We Know About Trump’s Impact On Musk’s EV Giant (Forbes)