IRS Will Stop Handing Out Subsidies To Tesla Buyers In 2020

From The Daily Caller

3:20 PM 12/14/2018 | Energy

Michael Bastasch | Energy Editor

The Treasury Department announced it would phase out electric vehicle subsidies for Tesla buyers at the beginning of 2019, and by 2020, those tax subsidies would completely disappear.

It’s an announcement the Treasury Department’s Internal Revenue Service (IRS) will be making more of in the coming years as automakers produce enough electric cars to trigger a phase-out of tax subsidies.

“Tesla, Inc. has submitted reports that indicate that its cumulative sales of qualified vehicles reached the 200,000-vehicle limit during the calendar quarter ending September 30, 2018,” reads an IRS notice published Friday.

“Accordingly, the credit for all new qualified plug-in electric drive motor vehicles sold by Tesla, Inc. will begin to phase out January 1, 2019,” the IRS noted. (RELATED: Congress Debates Whether More Tax Dollars Will Go Towards Add-Ons For Luxury Electric Cars)

Tesla hit the 200,000-vehicle mark earlier in 2018, triggering tax subsidies to phase out. Tesla buyers are still eligible for a $7,500 tax credit through the end of 2018, but subsidies fall to $3,750 per vehicle for the first half of the year before declining to $1,875 in the second half.

A 2018 Tesla Model 3 electric vehicle is shown in Cardiff, California,

A 2018 Tesla Model 3 electric vehicle is shown in this photo illustration taken in Cardiff, California, U.S., June 1, 2018. Picture taken June 1, 2018. REUTERS/Mike Blake.

By 2020, Tesla buyers will no longer receive federal tax credits, though they may still get state and local subsidies for electric car purchases. Congress may also extend electric car subsidies, which were put in place in 2008 when lawmakers worried about high oil prices.

Tesla and GM, the only other automaker to face a subsidy phase-out in 2019, are part of the EV Drive Coalition, which is pushing to extend subsidies for electric vehicles. The group claims subsidies are “essential to the continued development of the EV market.”

However, Tesla co-founder and CEO Elon Musk previously suggested Tesla didn’t need government subsidies to thrive.

“If I cared about subsidies, I would have entered the oil and gas industry,” Musk said in 2015.

Tesla and SpaceX CEO Musk speaks in a "fireside chat" at the NLC 2018 City Summit in Los Angeles

Tesla and SpaceX CEO Elon Musk speaks in a “fireside chat” at the National League of Cities (NLC) 2018 City Summit in Los Angeles, California, U.S. November 8, 2018. REUTERS/Kyle Grillot.

Conservative activists oppose extending electric car subsidies, arguing they primarily benefit high-income Americans at the expense of the working class and poor.

“They’re basically subsidizing rich people, but mostly rich Californians,” Tom Pyle, president of the American Energy Alliance (AEA) that opposes electric car tax credits, told The Daily Caller News Foundation in December.

Pyle called electric car tax credits a “reverse Robin Hood tax credit.” Republicans, including Wyoming Sen. John Barrasso, agree electric vehicles subsidies should be ended.

Barrasso introduced legislation to end the tax credit and slap a fee on electric vehicles, which would go toward the Highway Trust Fund. However, Republican Nevada Sen. Dean Heller introduced legislation to lift the subsidy cap and phase out tax credits in 2022.

A bill from Democratic Vermont Rep. Peter Welch in the House would completely remove the cap for the next 10 years.

Tesla did not respond to TheDCNF’s request for comment.

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106 thoughts on “IRS Will Stop Handing Out Subsidies To Tesla Buyers In 2020

  1. Well its a small step in the right direction. So now thy will switch from electric cars which mostly run from electricity produced by CO2producingfossel fuel power stations, to cars using fossell l fuel which itself also produces CO2. What a choice for the rich “We want to save the World”types.

    I truly feel sorry for them, sarc.


    • Musk said

      “If I cared about subsidies, I would have entered the oil and gas industry,” Musk said in 2015.

      Sounds like it is then time to send him a bill for those subsidy payments he received 200,000 times over. Since he obviously doesn’t care about them, he obviously doesn’t need them
      200,000 x $7,500 = 15,000,000 + interest compounded over the term

  2. “If I cared about subsidies I would have entered the oil and gas industry”

    The barefaced shameless cheek!

    • Then, Elon, write a check to the U.S. Treasury for the amount of subsidies issued to date. Uncle Sam is flexible. He will work out a payment plan for you with quarterly installments.

    • Someone once again confuses a subsidy with a tax break. The greens love to do that. In a subsidy, the government gives you unearned money; with a tax break, the government lets you keep earned money. A subsidy is money given; a tax break is money not taken.

      • Also, he forgot to normalize it. Big Oil as a whole does get more in tax breaks due to the production tax credit (which is for all manufacturing), but we sell about a thousand times more product than he does. We also pay more taxes than we receive in subsidies, unlike Tesla, which would not exist without billions of federal dollars

        • I suspect that the energy industry sells more like a billion times the product that Tesla sells.
          And pays in taxes and fees infinitely more than Tesla, since he pays $0 taxes.
          And he committed obvious SEC violations when he tried to manipulate the price of his stock via Twitter.
          And let us remember the millions of good paying jobs the fossil fuel industry provides in direct hires. And the many billions in taxes those millions of workers pay.
          Musk is a wannabe and drug abuser.
          Time for him to get off the stage.

      • Thanks for posting this Wade. You would think a generally conservative site like this one would be happy when people get taxed less. Alas some conservatives have so much blind hate for Tesla that they loose sight of the bigger picture.
        It’s quite interesting as a libertarian/conservative Tesla owner who does not believe in CAGW to read the Tesla forums and then Anthony’s site back to back. Not a whole lot of critical thinking takes place from most people that is for sure.

        • Gator, perhaps if you read the article and the postings again, you might be able to get that beam out of your eye.

          While it’s true that conservatives want over all taxes to be lower, no true conservative likes the idea of different tax rates for different people. Nothing conservative about that.

        • In a just tax system the tax should fall more on the rich rather than the poor.
          This is called a progressive tax system.
          Since only those with a lazy 5 figure cash surplus will buy this car and reap the tax subsidy, all it does is help the rich.
          Were government to really want the electric car to succeed they would fund fundamental university research on problems like battery storage and improving the efficiency of the internal combustion engine, rather than directing companies to build cars.
          The one and a half billion wasted on Tesla could then have been spent on vaccination programs and mental health in the US, rather than Tesla, plus pure research.
          This would mean a real dividend for those most in need, not the plutocrat rent seekers of California.

      • This subsidy is a transfer of tax liability away from rich Tesla buyers to the rest of the tax paying population of ALL incomes… or more properly, an increase in borrowed money to be paid by our children.

      • It’s like saying I was going to steal your wallet but I decided not to. So you are $100 richer than you would have been. You’re welcome.

    • Musk is correct that the Federal government provides numerous tax benefits to investors in oil and gas production. That has been true for many decades. The Federal government essentially subsidizes and gives tax breaks to favored industries, and oil and gas has been a favored industry for a very long time.

      After all, the GOP Congress just one year ago granted a huge multi-trillion dollar tax giveaway whose benefits went mostly to corporations and wealthy investors, with next to nothing going to average US taxpayers. The GOP did that because it could, not because it was the right thing to do for America.

      The subsidies paid to buyers of EVs positively pales compared to the giveways to the rich by the GOP Congress and Trump, who signed the bill and personally and heavily benefited by the bill.

      • Democrats can’t stand it when taxpayers get to keep more of their money through a tax cut. The Democrats think *they* are better at spending your money than you are, and resent it when their funds and power are reduced.

        People put their tax savings to work, they don’t hide it in the mattress. The same goes for big corporations. The private sector spends money much more efficiently than the government, so giving people their own money back in the form of a tax cut is good for the economy.

        You did notice the economy is booming, didn’t you? It happens every time a big tax cut is done. It happened during the Kennedy administration and it happened under the Reagan administration and it is happening again under the Trump administration. Tax cuts work.

        • The economy has been growing steadily ever since mid-2009, and it is certainly not “booming” now. It is growing at around 3% per year now, with the Fed projecting growth in 2019 at about 2%, and slowing still more in 2021 to 1.5%. The big multi-trillion dollar tax give away a year ago had, as expected, a temporary stimulant effect that is already now past. The growth is already slowing, and the stock market has already had a significant correction, largely having to do with fears over Trump’s stupid trade wars that he launched against not only China, but against most of our best allies too.

          • Like most acolytes, Duane has very flexible definitions of words.
            Yes the economy was growing since 2009. Barely. It was by far the slowest recovery from a major recession, ever. I also notice Duane desperately wants to skip over the first year of the Trump administration, after the tax cut that he so hates kicked in, where the economy was growing much faster.

          • “The growth is already slowing, and the stock market has already had a significant correction, largely having to do with fears over Trump’s stupid trade wars that he launched against not only China, but against most of our best allies too.”

            It will be interesting to see the figures on these new Trump trade deals. The U.S. stands to gain billions of dollars with these deals. Trump is the only one who would have taken on ths task, although all of our former leaders should have been working on it because these trade deals were very unfair to the United States. Past presidents allowed this theft to continue. Trump is putting a stop to it.

            The money Trump saves the U.S. on the new Mexico trade deal will pay for the southern border wall.

            Not reforming these trade deals would be a dereliction of duty on the president’s part.

            I do agree that these headlines probably have an effect on the stock market. But that’s always the case. I think another significant factor is all the computerized trading going on. When you see swings of 500 points, that’s not human beings doint that.

            Before computer trading a down day might be 100 points. Now a downday is 300 or 400 or 500 points down.

            My nephew writes the codes for these computer trading platforms (Citadel) by I personally think they ought to be outlawed. They exascerbate every moment of the stock market, up and down. I personally don’t benefit from this at all. You probably don’t either.

          • And we should probably mention the biggest factor in the current stock market downtrend, the recent interest rate increases which also had a negative effect on the stock market. A lot of people sold their stocks and put their money into bonds because of it.

          • In regards to the stock market, Duane demonstrates that he is more interested in protecting the narrative than he is in presenting the facts.

            Yes, the market did stumble when Trump started this trade war, but it completely recovered in the following months.
            If you really want to tie the current downturn to Trump, then it started right about the time the left started calling for impeachment again. (I don’t believe that there is any one factor that moves the market, but that’s the type of argument that Duane is determined to make.)

          • One final point. Even with it’s recent swoon, the DOW is still about 7000 points above where it was when Trump took office.

      • If you ever look into the claims, they always show, look the oil companies get to depreciate things. That amounts to 70% of the “tax breaks” oil companies get – and yet depreciating the cost of equipment is something every company is allowed to do – and really depreciation is a way for the government to get more money – since the value gets inflated away. Really capital expenses should be able to be written off in the year they are purchased.

        The rest of the breaks – though not as memorable to me – turn out to be standard breaks all businesses get as well. It is basically eco types lying about the situation. Elon Musk gets the same exact breaks, plus $7500 per car.

      • One of these days we will find something that Duane knows, that is actually correct.
        Once again, today will not be that day.
        The oil and gas industry don’t receive a penny in subsidies from the government. They never have.

        I also notice that like most good trolls, Duane hates it when people who earn money are allowed to keep their money. Instead of having it seized by the government so that it can be given to people like him.

        BTW, it’s the Democrats who are fighting to restore the full tax break for state and local taxes. A tax break that only benefits the wealthy. Duane’s desperate desire to paint class warfare as a partisan thing, is also a failure.

        • Well, yeah, but I have seen leftist groups post this before, and even show the claims. When I have seen the claims, it is always standard accounting stuff, depreciation and FIFO/LIFO accounting. Withs FIFO – when oil goes up fast, profits look higher temporarily if you use FIFO. They claim this is one of the tax breaks. Of course when prices drop FIFO makes costs seem higher – and profits lower, but then the leftist groups use last year’s numbers, so they can still whine about FIFO.

          So basically – the only way these accounting principles go away is if all companies are owned by the government – then they can’t get standard accounting “subsidies.”

          Not that they don’t get any subsidies – there are times government will help build roads to assist the oil companies, or approve pipelines more quickly – all minor stuff.

    • He gets the same subsidies as oil. For some reason the general accounting practice of depreciation, is OK for everyone else, but for oil companies it is a subsidy.

  3. “They’re basically subsidizing rich people, but mostly rich Californians,”

    “Republicans, including Wyoming Sen. John Barrasso, agree electric vehicles subsidies should be ended.”

    “A bill from Democratic Vermont Rep. Peter Welch in the House would completely remove the cap for the next 10 years.”

    Hmmmm, I thought Liberals were for the “Little Guy”, not the rich ?

    • Vermont is full of neo-hippie, trust-funded, faux farmers who’ve moved there to escape NYC. That’s how you get a Bernie Sanders.

      Normal people are fleeing the state because the economy is awful and there are no jobs.

    • “Hmmmm, I thought Liberals were for the “Little Guy”, not the rich ?”

      The Liberals say they are for the little guy but you can’t go by the words of Liberals you have to judge by the actions of Liberals and nothing the Liberals propose would help the little guy. Their proposals are all to spend more taxpayer money on giveaways to buy votes. The results of their spending, were they to gain the power to implement them, would be to bankrupt the United States. That can’t be considered to be helping the little guy.

      The only “solution” Liberals offer is to spend more money. They are a one-trick pony.

      • Always, someone else’s money. Never there own.
        The Democrats in various high tax states are fighting mad over a provision in the Trump tax cut that limited the deduction for state and local taxes. It hit rich liberals very hard.

        The latest news is that a bill to restore this tax break for the rich is one of the first thing on Pelosi’s list of things to do.

  4. My memory is fading but as far back as I can remember William Taft’s government did not subsidise Ford model T, so why would Trump do any differently.
    Anyone knows otherwise ?

    • Trump didn’t write the law. I don’t recall when it came into existence, but I would guess late “W” or early Obama. Trump is merely stuck with it. As long as he doesn’t go about extending the subsidy beyond what was stipulated in the original bill, I am OK with it. It would take too much political capital to cut it cold turkey.

    • Here’s a subsidy Obama gave GM:

      In GM’s bankruptcy, which normally would have washed away tax loss carry-forward credits, GM got to keep roughly $45B of them (worth about $16B at a 36% tax rate).

  5. Barrasso introduced legislation to end the tax credit and slap a fee on electric vehicles, which would go toward the Highway Trust Fund.

    Depending on where you live in America, you are paying between 25 and 75 cents per gallon of gasoline in taxes. link Electric vehicles don’t pay that. The conventional reason for gas tax is to keep up the roads. By not contributing to the upkeep of the roads, electric vehicles are effectively getting a subsidy.

    If electric vehicles become a large part of the market, states will feel the drop in revenue. At that point, they will slap a mileage tax on electric vehicles.

  6. Seems like the same as the solar wind-farm lark: The industry was granted loadsafreemoney at the expence of taxpayers to help get them launched, with the understanding that they had to make significant technical and volume-manufacturing advances that were promised.

    But they took the free money and ran up a large bar bill. Now the time comes to go cold turkey and they are squealing like stuck pigs.

  7. That’s $1.5 billion smackaroos wasted (so far) on an expensive toy for rich people, and benefiting a scam artist, Elon Musk. Not to mention the loss in gas taxes. And all so wealthy people can virtue signal about how they are helping “save the planet”. Disgusting.

  8. For EVs, wind turbines and solar panels, greenies are now arguing that they are competitive costwise, although this normally isn’t followed by calls to end subsidies.
    Greenies are rewarded for installing solar panels all over the place – purchase subsidies provide about half the cost of a 6KW installation, $6,000 I believe. And when they put excess solar output onto the grid, which cause the costs of non-renewable power to increase for their neighbors and also receive essentially retail prices for their power.
    I am hghly in favor of electric cars – it is a better and more cost efficient technology (even Henry Ford knew that) , once the battery prices get low enough, which they almost are at the moment. Those $7500 govt subsidies for EV buyers made at least some sense back when they were created – battery prices were roughly $600 per kWhr – the battery pack of early Tesla Model S cars was in the $30,000 to $40,000 range. Nowadays Tesla pays roughly $150 – $175 for batteries and prices are still dropping. Those subsidies were to encourage automakers to build more electric cars. That, plus the lowered costs of batteries have had a much greater effect than anyone hoped for – every automakers in the world has dozens of electric car models under development, most will have made an appearance before 2022 . Volvo will only make electric vehicles after 2019 and VW will also only build electrics. And so it goes for all automakers – Hyndai and Kia just came out with a well built $36,000 SUV and the Chevy Bolt runs about the same price. GM is going all electric. The subsidies are only beginning to phase out for GM and Tesla and Nissan. The other dozen or so automakers haven’t even begun to receive their subsidies, which will last for several year, at least. Elon Musk argued that subsidies are no longer required in order to prevent his competitors from having the same advantage he has enjoyed.

    • “Volvo will only make electric vehicles after 2019 and VW will also only build electrics.”

      That includes, and will mostly be, hybrids

      • IIRC, Volvo committed to producing no model that would not be available – if wanted – in a form with some electricity involved.
        So – Hybrids will be available for every model they make after 2019/2020/2021 [I am not sure of the year; it may be 2019, indeed].

        But not all-electric for all-vehicles made.


      • And the move is, in part, due to legally-binding EU mandates about carbon(dioxide) targets for new cars sold in the EU from 2020 onwards, not because electric is inherently “a better and more cost efficient technology” And a lot of the car makers (including VW since Kent specifically mentioned them) ambition plans for electrics are supported by government grants. If it wasn’t for government interference in the markets, EVs would not have much of a market presence.

    • I am hghly in favor of electric cars – it is a better and more cost efficient technology (even Henry Ford knew that) ,

      And yet Henry Ford abandoned electric in favor of the internal combustion engine. Because, contrary to your assertion, electric was not a better and more cost efficient technology back then, and it still hasn’t become that yet (better and more cost efficient technologies don’t need subsidies just to gain a tiny niche foothold in the market and they don’t need government mandates to eliminate the competition).

      once the battery prices get low enough, which they almost are at the moment

      almost only counts in horseshoes and hand grenades. Like the molten salt reactors you constantly bang on about, you are talking about things that haven’t happened yet as if they already exist. When battery prices get low enough then you can talk about how cost effective electric cars are. They’re not there yet.

      Elon Musk argued that subsidies are no longer required in order to prevent his competitors from having the same advantage he has enjoyed.

      and that is the only thing you said that has any truth to it. Since Tesla will soon no longer be eligible for the subsidy/tax incentive Musk has no problems with doing away with it (eliminating it won’t affect Tesla but it will affect the potential sales of his competitions EVs)

    • Mark, the acolytes have now changed the official definition of subsidy to include both the standard tax deductions that every company recieves and the government handouts that Musk gets and relies on (traditional subsidies, now labeled disbursements). It is this new definition that has successfully fooled the weak minded into thinking that fossils are getting far more from the government than wind and solar, when in reality Musk personally recieves more than any oil company.

  9. Electric motors produce heat, irrespective of the provenance of the electricity. That heat is dissipated into the atmosphere.

    • Well, if you push your car or hitch up a horse before (or after) it you or the horse will produce heat. That heat is dissipated into the atmosphere. See? You can’t win.

  10. Given the high price of Teslas actually available for order, I don’t think phasing out the federal tax credit will depress sales too much. It will probably have a greater effect on lower-priced vehicles like the Nissan Leaf. Likewise, imposing some substitute for fuel taxes to fund the road infrastructure is peanuts in the budget of someone who can afford a Tesla.

    I knew Georgia had enacted something but didn’t know the details — as I read the link provided above by commenter icisil, each EV owner is charged a $200 annual road use fee for a personal vehicle. The state fuel tax in Georgia is $0.263 per gallon for gasoline and $0.294 for diesel. So an EV owner pays Georgia the same road use taxes as a driver who buys 760 gallons of gas a year. That’s about double what I pay to drive my Avalon hybrid 15,000 miles a year.

    On the other side, EV owners get free use of the HOT (High Occupancy Toll) lanes, which with congestion-based pricing can cost up to $14 one way for a 16 mile stretch at the most expensive times.

    So at least in Georgia, EV owners in the metro Atlanta area can benefit from substantial subsidies.

    • Agree- I think it is totally unreasonable that EVERYONE should have to fund charging infrastructure for electric cars out of their taxation, even people who don’t drive.

      After all, electric cars are NOT beneficial to the environment. They might be less harmful than fossil fueled vehicles, but they are still harmful. Should we also subsidize the sales of business jets, because small jets are not as bad for the environment as a private 747 used to transport one or two persons? By the electric car subsidy argument, yes we should. Of course this is a false argument in both cases.

      • Even if electrics were better for the environment, it would still be unreasonable to tax everyone in order to subsidize the building of charging stations.

        • Depends on ones definition of “unreasonable”. If the benefit goes to everyone, then is it unreasonable to want everyone to chip in? Of course, the facts are that:
          1) the so-called benefits (to the environment) are no such thing. CO2 is not the evil that the backers of electrics think it is.
          2) the only real benefit is to the owners of EVs that would be making use of the charging stations. (which is currently a very small percentage of the population)

          You want to build charging stations, do like builds of some road do, charge a toll to those that use it.

          • Benefits going to everyone is only a valid argument when the service in question is non-excludable.
            The usual example is defense. Once you provide defense for an area, you are providing defense for everyone who lives in that area.
            Public charging stations are an example of an excludable service. The government has no business providing it.

            Regardless, do you really want the government deciding what services benefit everyone and what ones don’t?

          • What was in question wasn’t what I want, it was is it “reasonable” or not. As your example of defense shows, it is not necessarily unreasonable to expect everyone to pay for something that benefits everyone.

            Charging stations do not fall into that category no matter what lefties think, and I agree that government has no business providing it through the taxpayer. Charging stations are a form of infrastructure, as such I have no problem with government providing it though tolls at the charging station, much like we have tolls on bridges and certain roads (again, as long as the taxpaying citizens who don’t use the stations aren’t on the hook for paying for them). Let the people who would benefit from charging stations pay for it through such tolls and leave everyone else out of it.

          • By that same logic, government should build gas stations, grocery stores, and anything else that lots of people use.

          • It’s the same logic that gave us the interstate highway system, certain dams and bridges etc. that doesn’t mean government has to build them, but there is precedent for government building infrastructure.

  11. It just amazes me how the Greens have done such a swift about-face from condemning cars as a danger to everyone else in a city, but especially to cyclists, to wildly promoting them. After all the fuel type has little bearing on the hazards caused, so why the sudden change of heart?

    OK, rhetorical question. I think we know why and it is to do with who funds these organizations.

    • There used to be a time when liberals were against tax breaks that mostly benefited the wealthy.

      They are also demanding that full deductability for state and local taxes be restored, despite the fact that only people who pay more than $10K per year in state and local taxes would benefit from this change.

      • Indeed. however the problem is that in certain lefty/dem controlled states (IE blue states like NY or Cali), the property taxes in some areas are so out of control that the owner of even a modest little home could easily end up with a property tax bill close to that 10k or more. The problem, of course, isn’t with the limit on the SALT deduction, it with the outrageously high local taxes.

      • Mark W;

        In NJ, almost every owner of a single family home, however humble, is within spitting distance of that limit. The average is $8,969. I pay more than that, and according to Zillow, my home is 1,168 square feet, not exactly a mansion.

        • Perhaps the solution should be to get your local governments to stop wasting so much money, rather than force your fellow citizens to help pay for their incompetence.

          • Indeed, as I already posted “The problem, of course, isn’t with the limit on the SALT deduction, it with the outrageously high local taxes.” But as long as the citizens of those states keep voting in the bums who gave them such outrageously high local taxes (leftist dems mostly, though many a RINO as well), that problem isn’t going to be fixed. What’s worse is the idiots that voted the bums in then flee those high tax states and insist on voting for similar bums that promise to institute similar money wasting policies in the states they move to.

          • Unfortunately, as John Endicott points out, that’s a forlorn hope. NJ is a very blue state, with only a few pockets of red, and even those are mostly RINO’s.

  12. I am confused on “who” gets the $7,500 tax credit-subsidy.
    does the buyer of the vehicle get the $7,500 tax credit or does Tesla, which lowers the purchase price by that amount.
    A point to note, 45-50% pay little to no income tax. If the credit was given to some in that bracket it would be of no value. Of course most people in that tax brackets could never afford a Tesla.
    If the “tax credit” goes straight to Tesla allowing them to lower the sale price it is as stated a subsidy in disguise.

    It can help a small group that are on the edge of being able to buy the vehicle at true cost or fall slightly short.

    For most, if they can afford a Tesla they can afford to pay the true cost

    Bread & milk by all means subsidize novelty vehicles NO.


    • When talking of EV subsidies, there’s multiple issues to discuss.

      First is there’s the $2.4 billion in federal grants to support the development of next-generation electric vehicles and batteries that the Obama Administration offered up. That went to the makers of EVs, batteries, etc. Not sure how much (if any) of that money Tesla got it’s hands on.

      Then there’s the $7,500 tax credit-subsidy that you specifically mention. If you are leasing the EV, the credit goes to the manufacturer offering the lease, not by the lessee. Otherwise (IE you bought the car) the credit goes to you, further to that, the credit can not exceed you tax liability in that year. (IE if your tax bill is $2,500 than you only get $2,500 in credit not the full $7,500). So, yes, you need to pay income tax in order to take advantage of the tax credit (and at EV prices, there are few who don’t pay income taxes that would be shopping for one).

      • Is it a roll-over credit? IE, if you can’t take advantage of all of it this year, you get to rollover the credit to next years taxes.

        • No. The credit applies to the tax year that you bought the car. If your tax bill isn’t high enough to take full advantage of the tax credit, it’s too bad for you.

    • For a low volume, high end vehicle most of the money goes to the manufacturer who simply raises the price of the car by that much. The buyer receives a tax deduction, but pays more than he would if the subsidy was not available.
      It is true of all products. The market price is determined by the perceived value. If the customer is getting $7500 in deductions, Tesla is going to raise the price of the car $7500. As the deductions are phased out, you will see the prices come down the same amount. And Tesla will claim it is due to production efficiency. It is due to competition for customers who have many options to choose from. If the subsidy went up to $20,000, the price of the Tesla would do the same. We giving tax money to Tesla because we have a population that does not understand economics, and politicians that take advantage of that.

    • When I bought a Honda hybrid some years ago I was able to claim an income tax credit in the year I bought it.

  13. Tesla and GM, the only other automaker to face a subsidy phase-out in 2019, are part of the EV Drive Coalition, which is pushing to extend subsidies for electric vehicles. The group claims subsidies are “essential to the continued development of the EV market.”

    translation: it’s essential because people won’t buy them if they had to pay the full price because they are not cost-competitive with the internal combustion engine cars.

  14. In September 2018, sales of luxury saloons in the US were as follows:

    Mercedes-Benz C-Class 4,682
    BMW 3 Series 3,615
    Lexus ES 5,206
    Mercedes-Benz E / CLS-Class 4,072
    Infiniti Q50 2,075
    BMW 5 Series 3,470
    BMW 4 Series 3,174
    Audi A4 2746 3,185

    Tesla sold about 22,000 Model 3s. That’s way more than half the total of all the others put together. Musk has been tweeting about the end of subsidies. They will dominate that sector whatever. You might like to take a look at the Kia e-Niro and Hyundai Kona electric SUVs hitting the US next year which are a big step up in range – and the Koreans can probably ship them in sufficient quantity at a low enough price to seriously disrupt that market too. In the next couple of years Tesla will start shipping a pickup and they have the infrastructure now to take down Ford. If you are anti-EV wake up and smell the coffee.

    • Tesla pumped up Q3 so that Musk can try and restructure the $900 million bond payment coming due in March. Musk is trying to get bondholders to accept half the payment in Tesla stock.

      Tesla also built (and sold) only the high option Model 3 version to improve revenue, profit and cash flow for the quarter.

    • Tesla will start shipping a pickup and they have the infrastructure now to take down Ford. If you are anti-EV wake up and smell the coffee.

      Honestly for your own good go back on the meds

      • knr – can you answer my point rather than merely resort to insults? You are free to disagree of course

        • what point? you came up with a fantasy about how Tesla was going to be beat Ford in selling pickups.
          Have you any idea how many pickups Ford sells ?
          You simply and without question accept everything the man tells you . its been clear for years that once the the major manufacturers got into EV they be taken Tesla lunch from right under their noses. If anything has more car markers move into EV , its Tesla not VW , or Ford etc that are going to be in it deep.

          • And that was the point you should have addresses/attacked from the get go. Insulting the messenger while leaving the message untouched does no good. Now had you taken on his “fantasy” comment about outselling Ford in pickups, like you did here, you could still have concluded with the comment about taking his meds if you wanted because at least then you would have given a reason for why he needs to take them.

    • Ford has been in business since 1903. That is 115 years. They sold their first car on July 23, 1903, and by October 1, they were already profitable.
      They have seen many car companies come and go during that time. More are out of business than are still in business.
      Tesla was incorporated in 2003 and 15 years later, they are still deeply in debt. And the more cars they sell, the more money they lose. They lost $1,961,000,000 in 2017.
      You may think they are going to turn this around, but it does not show up in their finances, yet.
      And they are dependent on the utilities to provide reliable electricity in greater quantities than they are presently.
      The odds are against Tesla. They are driving up the cost of production, by increasing demand for materials that are not readily available in the quantities they require. Increased demand results in higher prices, but they need lower prices. And now the other car manufacturers are going to push prices even higher. They are skating on thin ice. If you are not improving your margins as you increase volume, you are on life support. And if they can’t make money in the highest margin segment of the market, going down stream will aggravate the problem, not fix it.

      • Russ R – yes Tesla may not make it as a company (although they did post a profit in Q3). Others will if they don’t. Tesla are significant insofar as they have demonstrated beyond reasonable doubt that the demand for the right EVs is there (look at the numbers again in the luxury sedan market).

        • There is also demand for private jets and personal yachts. The question is whether they can be built at a price that the public at large can afford. And have the infrastructure, durability, and features, that will displace an entrenched product line. So far, still a niche market.
          That might change. It might not. But your knowledge of whether it will or not seems less about knowledge of future events, and more about bias.
          Current cars require little exotic elements. Do we know how much Lithium is available, and how much it will cost to produce it, for millions of cars a year? Do we know how to charge all those cars, using windmills and solar? What about all the people that park in the street, or in parking lots? Are they going to pay for plugin access, or drag an extension cord?
          There are still many hurdles to overcome, and statements of knowledge about how future events will occur, should be met with skepticism. Unless the science is settled, by the experts of computer modeling. Then we are just supposed to acknowledge the wisdom of the software, and pretend they have no “conflict of interest” in the outcome.
          I am always skeptical of prognostications of future events. And when they are complex events, with many variables, many elements of the prognostication will be wrong. That is the one thing that I can Guarantee.

    • Nice job comparing apples to oranges there.
      Many of those cars are more expensive than the Model 3’s. After subsidy.
      Secondly, I notice that those automakers sell many makes of luxury cars, this further divides the market for such cars.
      Finally, all of those manufacturers sell non-luxury cars as well, which provides much of the infrastructure that they use to keep the prices of their luxury cars down. If they hand made those cars in the same fashion that Tesla does, the costs would be a lot higher.

    • EVs will always be expensive but don’t take my word for that-

      So Tesla is currently milking well to do virtue signallers and good luck to Elon in doing that but it remains to be seen whether or not the wealthy enviros will lower themselves to common Konas and Niros in order to save the planet and I suspect Tesla will hit a ceiling once he’s milked the initial rush of blood for his nameplate. He hasn’t produced his cheapy Model 3 for the masses yet because there’s no profitability in doing so.

  15. EVs are going to replace conventional fossil fueled vehicles and here is why:

    A combustion engine can reach a maximum efficiency up to 35%, an electric car up to 92%. This means that a regular car can cover a distance of about 35 km per 1 litre of fossil fuels, whereas an electric car uses about 5 KW to cover 92 kilometres. Add the volume of exhaust fumes released by the combustion engine car during those 35 km and carcinogenic substances released by braking; an electric car doesn’t do any of the above. Also, its construction is incomparably simple (it has 70 % less parts than a combustion engine car) and requires almost no maintenance.

    • EVhead

      No. Not true.

      Your simplistic “A combustion engine can reach a maximum efficiency up to 35%, an electric car up to 92%. ” means you have (deliberately) decided to ignore the inefficiency of converting energy to electricity. Varies between 16% (PV panels, to 61% (combined cycle gas turbine) to 43% (conventional coal) to single cycle gas turbines to nukes at about 36%. Of transforming that electricity to higher voltages, transmitting it across country and then re-converting it near the charging site into DC. The inefficiencies of creating the battery, of charging the battery multiple times, of losses re-converting the chemical energy into DC power. No more hydro can be produced in the US due to enviro concerns – forget that as added energy source. Wind? 1/6 efficiency factor.

      Braking releases carcinagens, eh? And electric cars (even when regenerative braking) release the same “self-called” carcenogens.

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