Sign up for daily news updates from CleanTechnica on email. Or follow us on Google News!
A big part of this story was originally going to be about why Elon Musk has turned on Democrats, focusing particularly on he and Tesla getting slighted by Joe Biden in a press conference that really didn’t matter or mean anything. However, going into all of that probably doesn’t matter to people who don’t already know about it, so let’s just focus on policy matters.
To kick things off, and just to clarify, as far as I’m aware, Biden and Democrats in Congress haven’t done anything policy-wise that is “anti Tesla.” As far as Republicans, when they had control of both the presidency and Congress, they didn’t really do anything against Tesla either, but they hardly did anything legislatively anyway. The one big legislative package they passed was massive tax cuts for the richest of the rich, something that skyrocketed the national debt. Perhaps that helped Elon Musk personally, but it didn’t help Tesla.
There are several things Biden’s administration and Democrats in Congress did do, though, that has supported Tesla — massively.
Reviving the federal EV tax credit for Tesla: For a little bit of a history lesson, originally, the federal EV tax credit was supposed to have a 200,000-vehicle cap. In order to get more EVs on the road, pro-EV lobbyists from Plug In America convinced lawmakers to make that a 200,000-vehicle trigger point per automaker — once an automaker sold 200,000 EVs, the maximum amount an EV buyer could get would gradually decrease and then be phased out completely. Tesla passed the 200,000 vehicle marker and fully went through the phaseout period, getting to the point that no one buying a Tesla could get a federal EV tax credit of any sort. With EVs from other brands essentially offering consumers a $7,500 discount while buying a Tesla would get you $0, other electric cars had become highly competitive against Tesla’s cars. At the time, it wasn’t the biggest deal, because there weren’t that many competing long-range electric vehicles, but the options on the market have improved considerably, especially in the past two years since the Inflation Reduction Act was passed. What the Inflation Reduction Act did, among many other things, is it completely revived the tax credit for Tesla. Now, there were also requirements that would come into effect regarding where the car and its battery were produced (they couldn’t come from China), but that’s a separate matter and all versions of the Model 3 and Model Y are now eligible for the full $7,500 tax credit. Again, this is effectively a $7,500 discount for Tesla buyers that Biden and Democrats in Congress got the company.
Subsidies for Tesla’s battery pack production, battery cell production, and lithium extraction and processing: The Inflation Reduction Act of 2022 also brought about subsidies for each of these things separately. That means that for one EV battery, Tesla gets tax credits for multiple steps in the battery creation process — mining/extraction, lithium processing, cell production, and pack production. This is a large amount of financial support for Tesla, and it’s the only automaker benefiting so much. Other automakers may be involved in battery pack production, but no one else is as vertically oriented as Tesla on this. So, again, this helps Tesla’s financials and helps Tesla’s competitive advantage versus other EV producers.
NEVI funding: The Biden–Harris administration also initiated a massive program to get more EV charging stations installed across the United States. That’s National Electric Vehicle Infrastructure Formula (NEVI) funding. “As of May 2024, Tesla had won an estimated 13% of the National Electric Vehicle Infrastructure (NEVI) program’s awarded funds, or about $27 million across eight states. Tesla has won awards to build chargers for 69 of the 501 NEVI-funded sites announced so far,” Google writes.
Saving carbon credits in California: Automakers in California have to sell more EVs than they do elsewhere, or pay for not doing so. These higher fuel economy standards are a state right provided under the Clean Air Act that was enacted under President Richard Nixon. Donald Trump’s White House sued to take this right away from California. When automaker don’t sell enough EVs in California, they then buy carbon credits from an automaker that sells more than they are required to in order to meet their requirements. Tesla, producing far more than it’s required, makes a lot of money by selling these carbon credits to other automakers. If California’s requirements were lowered to the level of the US ones, Tesla would make a lot less money selling those carbon credits. Fortunately, when Biden came into the White House, he immediately dropped that lawsuit against California and the Clean Air Act.
Stronger US fuel economy standards: Tesla’s original mission was to accelerate the transition to sustainable energy, particularly by accelerating the transition to electric vehicles (which can be fully powered by solar and wind energy). That’s exactly what US fuel economy standards do. However, when Donald Trump became president, his EPA weakened the country’s fuel economy standards. When Biden later took over the White House, he reversed that and brought the nation’s fuel economy standards back up again, requiring automakers to sell more EVs sooner. Perhaps this one doesn’t directly benefit Tesla, but it is completely in alignment with Tesla’s supposed mission to accelerate this transition to electricity.
I’m sure I’m missing some other things, but this is a strong list of actions Democrats have taken that benefit Tesla financially and more broadly. While Joe Biden may have hurt Elon Musk’s feelings a bit by not including him in certain EV-focused events and press releases — and I understand how inane and ridiculous that is — there’s no doubt about which political party has done more to support Tesla. Oh yeah, and I forgot to mention the early government loans Tesla received under the Obama administration to help the company grow, survive, and mature. Meanwhile, the Republican Party hasn’t done anything to help Tesla, and there’s no indication it would do anything to help Tesla if Donald Trump was elected again. In fact, it’s much more likely the party would revert to doing things that would harm Tesla and its mission.
Is it more important to stroke one’s ego or to implement strong federal policies that support a company? I think the answer is obvious, but, apparently, many people don’t.
If I missed anything that should be in the list above, let me know down in the comments.
Have a tip for CleanTechnica? Want to advertise? Want to suggest a guest for our CleanTech Talk podcast? Contact us here.
Latest CleanTechnica.TV Videos
[embedded content]
Advertisement
CleanTechnica uses affiliate links. See our policy here.
CleanTechnica’s Comment Policy
Share this story!