Guest essay by Eric Worrall
Tesla share prices have crashed in the wake of news that President Trump’s Republican administration is introducing a bill to abolish Federal tax credits for electric cars worth $7,500 per vehicle.
Tesla share crash amid Republican bid to kill off electric car tax break
Didn’t help that the automaker’s financial results also sucked
By Kieren McCarthy in San Francisco 2 Nov 2017 at 18:47
Tesla’s share price took a dive Thursday morning as Republicans in Congress revealed they were planning to kill off a US federal tax credit for electric vehicles.
Its share price fell more than seven per cent to about $296 apiece from Wednesday’s $321. The draft law emerged as the Elon-Musk-led automaker announced its worst-ever quarter, recording a $671m loss and admitting it had not met its production target for its new Model 3 car, producing just 220 of them against its 1,500 target.
Economists believe that the tax credit is a key driver for electric car sales, and cite the example of when the state of Georgia cut its $5,000 tax credit and saw sales of electric cars slump from 1,400 a month to just 100 a month in response.
Scrapping the leccy car deal will increase US tax revenues by $4bn, it is estimated. That’s a good saving seeing as the Republicans are desperate to balance America’s books while cutting things like the corporate tax rate.
Its a little early to call the end of Tesla – Elon Musk over the years has demonstrated a rare genius for wheedling corporate welfare out of green politicians. Tesla shares have regained some of the ground they lost.
But this move could be the start of a larger trend. As I predicted in October, generous green subsidies are an obvious soft target for cash strapped governments.