Tesla VS Biden’s Tax Incentive For Electric Cars In America
Elon Musk to increase Tesla production in China.
In early November this year, Elon Musk took to Twitter to ask his 62.5 million followers if he should sell 10 percent of the 170 million Tesla shares he owns.
He linked it to a Democratic congressional proposal to levy a tax, under certain conditions, on billionaires for unrealized stock gains. Musk, whose stake in the USD1.2 trillion company is worth USD208 billion, is not a fan of the idea.
Then on November 11th, Reuters reported that Tesla had models would not qualify for an additional tax credit in the President Biden’s USD1.8 trillion spending plan because his electric vehicles are made by non-unionized employees. But Musk has other drivers for success, mainly China.
Biden’s electric-vehicle push picks clear winners and losers. A proposal being considered in Congress would add an extra USD5,000 tax credit for electric vehicles and EV batteries made in the United States and with organized labor, on top of the USD7,500 that is currently available.
So far, General Motors’ Chevrolet Bolt EV is the only model that qualifies though future versions of Ford Motor’s F-150 EV pickup truck, GM’s Cadillac Lyriq and Hummer EV’s would also be eligible.
Right now China is Tesla’s main export hub and last year, revenue more than doubled to USD6.7 billion while it grew by 20 percent in the United States to USD15.2 billion.
China accounted for about half of overall global electric-vehicle sales in September, according to Rystad Energy, and Beijing has set a goal of EVs making up 40 percent of all vehicle sales by 2025.
Cheaper Chevrolet EV’s have made some inroads into the United States, but a recent battery recall had cut its market share by more than half from the second quarter to the third to 4 percent, according to Experian.
Tesla already plans to go down in price point, with a USD25,000 model possibly launching in 2023. That will keep their sales moving along, even without the extra Biden tax incentive boost.
Still, Tesla continues to dominates the U.S. electric vehicle market with about 73 percent share in the third quarter, according to Experian. Teslas are already expensive as compared to its near rivals and its sales haven’t been dented despite that tax credits already favor other cars.
The USD7,500 consumer incentive maxed out for the firm in 2019 when it surpassed 200,000 qualifying vehicle sales. But Tesla sales surged more than 70 percent in the third quarter of this year.
ASEAN nations need to introduce similar to Biden’s tax incentives for higher EV adoption from the middle class car buyer. Thailand has been the first and Malaysia recently announced their own tax incentives in the 2022 Budget.
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