Sign In or Create an Account.

By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy

Sparks

Elon Musk Is Getting What He Wants

It’s official: Trump is out to kill the EV tax credit.

Donald Trump.
Heatmap Illustration/Getty Images

The Trump administration is hoping to kill the $7,500 tax credit for electric vehicle buyers, according to a Reuters report citing two anonymous sources within the Trump transition team.

That aspiration isn’t totally unexpected — President-elect Donald Trump flirted with ending the EV tax credit throughout the campaign. But it’s nonetheless our first post-election sense of how the Trump administration plans to pursue the Republican tax package that is expected to be the centerpiece of its legislating agenda.

If the EV tax credit is repealed, it would deal a significant setback to the American auto industry’s attempts to make the transition to electric vehicles. General Motors, Ford, and other legacy automakers have invested billions of dollars to build EV factories and battery plants in order to prepare for an electric future. The Alliance for Automotive Innovation, the automaking industry’s trade group, has privately lobbied lawmakers to keep all of the Biden administration’s subsidies for EV production.

GM and Ford aren’t doing this just for the climate. They’re trying to compete with European and East Asian automakers that are transitioning to EVs — and will continue to transition, regardless of policy changes within the United States. BYD, the Chinese company that exclusively makes EVs, is on track this year to sell more cars globally than Ford. That’s the entire Ford line-up, not just EVs. China has reached its commanding position in the EV industry partly by offering EV consumers and companies more than $200 billion in subsidies, according to an analysis from the Center for Strategic and International Studies.

The rollback would also be a setback for Tesla and Rivian, the two highest-profile American EV-only companies. Yet according to the same Reuters report, Tesla supports the plan to repeal the tax credit. Elon Musk has asserted in interviews that because Tesla has more experience building EVs than any other company, it would suffer least from the subsidy’s disappearance. (As the country’s No. 1 EV seller, Tesla has also likely benefited from EV tax credits — in their current and pre-Biden forms — more than any other company.) Repeal is part of Musk’s hypothesized plan to turn Tesla into a de facto monopoly, controlling the entire American EV industry.

Rivian shares have fallen 11% today, while Tesla’s are down just 5%. Ford and GM are trading flat.

The new GOP majorities in Congress hope to extend their 2017 package of tax cuts, which mostly benefit wealthy Americans. One way to pay for those tax cuts could be to repeal the tax incentives in the Inflation Reduction Act, President Joe Biden’s landmark climate law. The news today, then, is mostly a sign that the battle lines are being drawn in the auto industry: Much of the auto industry wants to keep the full slate of EV subsidies. Tesla wants to take them down.

You’re out of free articles.

Subscribe today to experience Heatmap’s expert analysis 
of climate change, clean energy, and sustainability.
To continue reading
Create a free account or sign in to unlock more free articles.
or
Please enter an email address
By continuing, you agree to the Terms of Service and acknowledge our Privacy Policy
Sparks

Trump Uses ‘National Security’ to Freeze Offshore Wind Work

The administration has already lost once in court wielding the same argument against Revolution Wind.

Donald Trump on a wind turbine.
Heatmap Illustration/Getty Images

The Trump administration says it has halted all construction on offshore wind projects, citing “national security concerns.”

Interior Secretary Doug Burgum announced the move Monday morning on X: “Due to national security concerns identified by @DeptofWar, @Interior is PAUSING leases for 5 expensive, unreliable, heavily subsidized offshore wind farms!”

Keep reading...Show less
Blue
Sparks

The House Just Passed Permitting Reform. Now Comes the Hard Part.

The SPEED Act faces near-certain opposition in the Senate.

The Capitol and power lines.
Heatmap Illustration/Getty Images

The House of Representatives has approved the SPEED Act, a bill that would bring sweeping changes to the nation’s environmental review process. It passed Thursday afternoon on a bipartisan vote of 221 to 196, with 11 Democrats in favor and just one Republican, Brian Fitzpatrick of Pennsylvania, against.

Thursday’s vote followed a late change to the bill on Wednesday that would safeguard the Trump administration’s recent actions to pull already-approved permits from offshore wind farms and other renewable energy projects.

Keep reading...Show less
Sparks

AI’s Stumbles Are Tripping Up Energy Stocks

The market is reeling from a trio of worrisome data center announcements.

Natural gas.
Heatmap Illustration/Getty Images

The AI industry coughed and the power industry is getting a cold.

The S&P 500 hit a record high on Thursday afternoon, but in the cold light of Friday, several artificial intelligence-related companies are feeling a chill. A trio of stories in the data center and semiconductor industry revealed dented market optimism, driving the tech-heavy NASDAQ 100 down almost 2% in Friday afternoon trading, and several energy-related stocks are down even more.

Keep reading...Show less