back to article Tesla share crash amid Republican bid to kill off electric car tax break

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. The proposed US House tax bill calls for an immediate repeal of the $7,500-per-vehicle credit: something that would have an immediate knock-on impact for Tesla given …

And the beautiful thing is lawmakers are exempt from insider trading restrictions.

49
1

I know and to think Obama had 8 years to fix that and did nothing.

8
8

Because they have to have blind investiment rules set for Congress.

4
0
Anonymous Coward

That ended under bush Jr.

0
0
Silver badge

The crash is the result of knee jerk reactions of people who don't understand the credit anyway. Musk probably thinks it's a joke since the tax credit is limited to the first 200,000 units sold in the US for any given manufacturer. At the end of 2016 Tesla was already over the half way point at 110k+ US sales and if the same ratio of US sales to units built was maintained this year Tesla would be scheduled to limit out fairly early in the first quarter of 2018 if not later this year.

In short Tesla is already nearing the end of when its buyers could claim the credit anyway and if it happens a month earlier than expected it isn't going to change Tesla's situation much. On the upside the dip is now priced in instead of being priced in after they sold number 200,000 in the US which would be in about a month or two. Those of us who were already keyed in on this can now take our Tesla shorts early and move on to the next fully predictable market over-reaction.

2
1
Silver badge
Pint

Because General Motors believes in an all-electric future…

Wow. Things sure have changed!

20
0
Silver badge

They've been working on electric cars for at least the last 30 years. Back when they started the biggest problem was with weight (batteries) and range. They were looking at the delivery industry as their market (UPS, US Mail, etc.). It wasn't a large program, per se, but they were doing some things outside the box to work through those issues.

8
5
Silver badge

Actually, he's probably referring to the legendary EV-1 fiasco.

18
1
Silver badge

Ah.. I didn't think of that one. Too many disasters floating about.

6
0

"Green Prince of Darkness" at FauxScienceSlayer > photovoltaic fraud

"Tesla Burns $16 Million per Day" at ZeroHedge website.... sustainable stupidity....

Chicken Little science begets Jack-in-the-Beanstalk solutions

7
1

No, Auto makers have been working on electric cars since the late 1800's.

7
2

The last thirty? Try the last hundred. Edison was experimenting with electric cars back in the early 1900's. There was a fad for electric cars in the 1920's and early 1930's, latterly in the late 70's and early 80's. Now in the 2010's. Every single time they've been found impractical for the same reasons, range and refuel times.

With Tesla's there are issues on build quality and catastrophic suspension failures.

9
2
Bronze badge

to be fair

they had electric cars for over a hundred years, but the Big Three have not carried anything in their sales line or been doing any continuous development until relatively recently.

2
0
Silver badge

At one time (late 1800s) the absolute world speed record was held by a battery powered car.

2
0
Bronze badge

The EV-1 wasn't a fiasco. California had passed a law that mandated that any manufacturer that wanted to sell cars in California would have to sell a certain number of zero emissions vehicles. CA is a big car market and many states in the US tend to follow CA on certain issues. Once the critical number of politicians were paid, the law was repealed and GM took back the leased EV-1's and crushed them so competitors couldn't buy them up cheap and reverse engineer any of the tech. If the law stayed on the books, GM would have been in the leading position. GM was covering it's backside and probably learned a bunch during the process of development that they are using now. With the increase in battery power density and the decrease in cost, an EV is marginally affordable.

The US can afford to spend the money on incentivizing EV sales. They spend far more to have the military in the Middle East keeping the oil flowing. If there wasn't the need to import massive amounts of crude into the US by eliminating a large chunk if it being used for personal transportation, much or all of the armed forces could be brought back home and the region could jihad itself into oblivion without affecting anybody else. Part of the problem is that a large military means lots of highly paid military equipment suppliers. Those suppliers have big sponsorships of politicians to keep any semblance of rational thinking from happening.

3
7
Anonymous Coward

You gotta be kidding...

The following statements are part of the rules for this "forum".

1. We want our comment forums to remain a lively, stimulating and noisy place to hang out.

2. We publish what we feel is fit for publication.

3. We try to be broad-minded and consistent – but in the end if we don't want it on our site, it doesn't go up or stay up.

I guess it goes without saying that an article about anything involving saving our planet, restricting our freedoms, and basically selling out our nation would be found here. Obviously, the gospel of global freezing, sorry, global warming, no, scratch that, global climate change, is bound to rear its mindless head here.

Do you really believe the only reason we have a large military is to sell cars from the Big Three?

This may come as a shock, but other countries' peoples come to ours selling their interests. As an example, the freak that just attacked New York a few days ago, not to mention the many attacks thus far committed in the US. Your response really pretty much says we can scale back our defense forces if we didn't help Detroit automakers by ensuring oil is in supply for their profit making, job producing entities. As a matter of fact, if we were to rid our country of our progressive statists, we could actually tap the full assortment of our country's oil, nuclear power, et cetera.

Consider this: Shut down our filthy, immoral coal industry and see how much electricity you'd have left to power those funny little cube beep beep electric cars. Fact is, right now, with the technology and resources we have, we are being well served. We The People want to drive trucks and SUV's, powerful ones, because we can. Plus, no, our country, our people, cannot afford to use tax payer money to promote Solyndra like scams, of which EV cars is one.

Please educate yourself properly in these matters.

Due to the aforementioned rules I listed at the top, I cannot be sure this post will even reach the discussion. TheRegister wants our comments, and for us to have lively informed debate, but as they state, as long it agrees with their ideology.

1
7
(Written by Reg staff) Gold badge

Re: You gotta be kidding...

So this is your first post here. Question is: why bother?

5
0

Battery powered cars are a 180 year-old "technology" that has always been a hassle to operate. Simple as that. Batteries are not as energy dense as oil and not as convenient, that is why battery powered cars have been regulated to golf carts and toy cars. A one hour "fill up" can't win with a 5 minute stop at a gas station without subsidy from government and on top of that it's a subsidy for a 100K car on the backs of the very people who can't afford them. But this is what you get when government selects the winners and losers of a crony capitalist game. If you want to rock the future and hate gasoline, why hang your hat on a losing 180 year-old "technology"? Whatever happened to hydrogen powered cars? A far better way to power a car instead of a wall plug but . . . no government subsidy. If plug-in electrics hadn't been favored by Washington DC idiots who wouldn't know energy density from second base, we'd be driving, or on the verge of driving, hydrogen cars by now and more people could afford them too. No one hour fill-up, no changing out the power plant at 100K no $100,000 car with 50 grand of amenities.

4
2
Silver badge
FAIL

"The US can afford to spend the money on incentivizing EV sales."

but why would we WANT to? Gummint subisidizing of any tech just results in the rich getting richer, and the poor paying for all of it through higher taxes and/or more national debt.

Better to get rid of ALL of the targeted tax breaks. ALL of them. Wealth re-distribution via the tax code is probably the fastest way to a 2-class society, "haves" and "have-nots".

Besides, gasoline is cheap liquid energy. let's keep using it. With fracking, we don't need Middle East oil any more. FYI the wars over there are against TERRORISTS. Like ISIS. It has nothing to do with "the flow of oil". The USA doesn't need Middle East oil any more. Not since 'fracking'.

4
2
Silver badge
Meh

Re: You gotta be kidding...

well, a lot of it is the venting of frustration against the constant drip, drip, drip of socialism, religious environmentalism, and media bias. Better to do a targeted attack with a smart bomb than to attempt a cluster-bombing from 40,000 feet.

As for me, I don't want to be taxed in order to pay for some rich guy's Tesla. If someone wants a Tesla car, let him buy it with his own money, and NONE of mine. I'll stick to a dino-burner, thanks. So let the loopholes get shut down, EVERY! ONE! of them. "They" need to stop using the tax code to manipulate people and/or pick 'winners' and 'losers' anyway.

4
1

"They've been working on electric cars for at least the last 30 years."

Ahh ignorance is soo bliss.

The FIRST cars EVER designed were in fact ELECTRIC. try adding 100 years +/-

Go back to your cave

0
3

Re: You gotta be kidding...

In order to understand your comment one needs a brain and clear at that. I am afraid that the immense amount of brainwashing in the contemporary "progressive" educational system makes this all but impossible. Sad.

0
2
Anonymous Coward

The US $20,000,000,000,000,000,000+ in debt. We can't afford anything.

2
0

Really? How can the U.S. afford this when we are 20 trillion dollars in debt. The constitution does authorize the federal government to take our hard earned money to provide for defense. Can you please tell me where in the constitution does it authorize congress to take money from me and give it to Elon Musk? or anyone else trying to sell things We the People don't want

1
0
Silver badge
Coat

Re: You gotta be kidding...

@FreedomIsn'tFree

Obviously, the gospel of global freezing, sorry, global warming, no, scratch that, global climate change, is bound to rear its mindless head here.

Well, it would help if the US administration could sing from the same hymn sheet on that front:

"Climate change: US report at odds with some in Trump team"

http://www.bbc.co.uk/news/world-us-canada-41868878

As for middle eastern oil...

"Trump pitches for $2 trillion Saudi Aramco oil float"

http://www.bbc.co.uk/news/business-41869135

"Would very much appreciate Saudi Arabia doing their IPO of Aramco with the New York Stock Exchange. Important to the United States!"

1
0

"The US can afford to spend the money on incentivizing EV sales." The $20-trillion-in-debt US can "afford" more handouts to subsidize electric cars? No! Not a penny more! Electric cars are toys for the wealthy. It is absolutely absurd to pay wealthy liberals thousands of dollars so they can explore their electric car fantasies. In an unfettered marketplace, electric cars would never get any bigger than golf carts. Elon Musk is a fake businessman. His entire business model rests on massive taxpayer subsidies. Take away the subsidies, and Musk's business empire would collapse. Gasoline-powered cars are perhaps the most successful and proven mode of transportation ever invented. We should be building more of them, not less. Electric cars have never and WILL NEVER replace gas-powered cars unless government entities intervene to force people to buy them. They failed 100 years ago and will continue to fail.

1
0

Re: "Green Prince of Darkness" at FauxScienceSlayer > photovoltaic fraud

Chaps & chapesses might want to peek at the referenced PDF for some pretty devasting proofs, like:

"Solar radiation strips protons from Nitrogen atoms, creating Carbon-14." -

"When exposed to sunlight, the Boron atom losses it’s easily excited fifth electron, which travels the Si

licon matrix using the Phosphorus “hole” to the conducting collection grids on both sides of the photovoltaic cell and permanently exits the cell. ... There is a constant loss of electrons in this system and power production erodes over time until, at twenty years, they are useless."

and many other PDFs reward the purveyor of extra-strength frog pills:

"When Alfred Nobel invented Trinitrotoluene (TNT), it was a quantum leap in pound-per-pound energy when compared to previous chemical explosives." [quoth Wikipedia: "TNT was first prepared in 1863 by German chemist Julius Wilbrand and originally used as a yellow dye. Its potential as an explosive was not appreciated for several years, mainly because it was so difficult to detonate and because it was less powerful than alternatives."]

...and oil is made from natural radioactive decay, which may also explain the Bermuda Triangle. This is so self-evident that no decay series or quantities are given, as no-one wants the self-evident belaboured...

"oh...."

1
0

4bn divided by 7500 gives me a bit over 530k. There are that many electric vehicles sold in the US per year? Or does the same amount apply to hybrids?

10
2
Silver badge
Windows

I rather sincerely doubt that there are 530,000 green vehicles a year going on the road. There is some other number in there making this up. US legal bills tend to have 6 or 7 (LOUDLY) trumpeted bits and 40 or 50 little one liners that do wunnerful things hidden in them.

21
0

I believe the requirement is that the electric range has to be larger than the non electric range (this affects the BMW i3 with range extender for example which has an artificial fuel tank limit in the US). Regular hybrids (like a prius and such) does not apply since the electric range is much shorter than the non electric range.

2
0

Maybe someone is assuming Tesla will actually make 300000 model 3s in 2018 and sell them all in the US. Or they expect the Bolt to sell a lot of cars.

4
0
Silver badge

It also applies to plug in hybrids at a lower rate based on the whimsy of bureaucrats but the full $7500 applies only to fully electric vehicles.

You can see the whole list and the credits here.

Just as well it's gone. They still use the roads but pay no road tax that is incorporated into gasoline and diesel. It's also just a tax break for those wealthy enough to splash the extra cash and own a home as not many apartments have charging facilities if they even have off street parking. Mostly a tax break for the rich.

20
15
Silver badge

Yep! Just as well!

Europe's EV manufacturers will be delighted to see the tech industry's attempt to eat their lunch go up in a puff of Trumpery. How're Apple's shares doing? What about Google?

2
3
Anonymous Coward

4bn divided by 7500 gives me a bit over 530k. There are that many electric vehicles sold in the US per year?

I asked the same question. The tax credit as it stands now has a per-manufacturer quota of 200,000 units. Once it is reached, the credit is gradually phased out for that manufacturer's products. I guess the (not entirely unreasonable) idea is to help the manufacturer with the startup costs for EV production. Once the NRE is covered, the support stops.

So 4bn appears to be the lifetime gain, not per year. In the grand scheme of the US finances, that's slightly less than nothing.

24
0

RE: 4bn divided by 7500 gives me a bit over 530k.

It's a government run program. There will be $1bn in credits and $3bn in administration.

11
7
Anonymous Coward

"Just as well it's gone. They still use the roads but pay no road tax that is incorporated into gasoline and diesel"

This is my main annoyance with electric car subsidisation in the UK. Most electric cars will be sold to above average earners, who are being subsidised by everyone who pays taxes, many of whom can't afford an electric car, even with a subsidy. The people who have an electric car then benefit a second time because of the lack of fuel duty on the electricity they use to power their car. It wouldn't matter so much if electric cars were affordable to everyone, but if that were the case, fuel duty would have been replaced by a GPS / ANPR based tax system by now. The fact that no-one in government has even thought about implementing a feasibility study for this means that they don't expect electric cars to become widespread. (Or it could just be that they're too busy dealing with internal party politics to do their jobs...)

17
5

That is the case with most of these 'subsides'. Solar panels is another case, you need to be able to invest in panels in the first place which means the people who receive the subside would have done without it in the first place.

In both case of electric cars, the argument could be that it helps kick start infrastructure changes that will be required before a mass rollout.

2
2
Silver badge

"I rather sincerely doubt that there are 530,000 green vehicles a year going on the road."

According to the article, Georgia had monthly sales of 1400 before cutting their own tax credit. It would only take 32 states with sales like that to hit the 530k figure. Apparently Georgia is fairly big in terms of population and economy so it may be a bit of an outlier, but given there are 50 states in total it's still not an obviously silly figure.

However, that also highlights a rather big problem. Georgia had those sales before they cut the tax credit. After they cut it, sales dropped by more than an order of magnitude. Even if we take the figure given as a realistic one, you're not going to rake in billions by cutting tax credits on those sales because those sales won't be there if you cut the tax credit.

6
3

"you're not going to rake in billions by cutting tax credits on those sales because those sales won't be there if you cut the tax credit."

If you're not issuing credits anymore, then it doesn't matter whether there are any sales or not. Either way, you're avoiding issuing the credits.

7
1

Funny.....

"Just as well it's gone. They still use the roads but pay no road tax that is incorporated into gasoline and diesel"

How I look at my electric bill heaped with taxes to state and county. It will be made up one way or another. Wouldn't surprise me to see a Fed Tax on the electric bill soon.

3
0

Tax Law - I doubt MANY who qualify for the credit can use it.

"you're not going to rake in billions by cutting tax credits on those sales because those sales won't be there if you cut the tax credit."

Maybe all of you should ACTUALLY look at how the credit works. If you get a credit, but have NO tax liability or are getting a refund before the credit, you get nothing. I am getting REAL sick and tired of all the news not researching before posting articles. I never read the current news anymore because three days later, the truth tends to finally get out and of course the retractions are ALWAYS buried in small print (true regardless of political affiliation) See below:

=======================================================

What does it mean that a $7,500 credit is allowable for vehicle? Why wouldn’t I get the full amount?

A manufacturer has to certify to the IRS that a particular make, model and model year meets the requirements for the New Plug-in Tax Credit and certify the maximum amount of credit allowable based on that vehicle’s battery capacity. However, although a vehicle qualifies for a certain amount of credit, there is no guarantee the taxpayer will be able to claim the full amount. The New Plug-in Tax Credit is non-refundable so the purchaser can only claim it to the extent he or she has a tax liability that year. For example, if a taxpayer purchases a vehicle for which $7,500 of credit is allowable, but the taxpayer only has a tax liability of $3,000 then he or she won’t be able to use $4,500 of the allowable credit.

7
0

Re: Tax Law - I doubt MANY looked at it

Many tax schemes are like that in Canada, only helps those with high tax bills to pay, or offset, and rarely applies to the majority even though the government says otherwise. Tax cuts have been promised by every government for generations and percentage of total tax due on income and assets for the middle and lower continue to increase each generation.

Then again in Canada our Prime Minister thinks the average income is well over the 6 figure mark, when it is closer to $40K and almost half of that due in taxes and fees. Our government believes the average Canadian can afford an elect car and a house with a garage in or near a major city so it isn't as though they are lying on purpose and that group has seen percentage taxes decline for generations.

4
1

??

1400 cars each year in 32 states is only 44,800 cares. That is a far cry from 530k vehicles.

2
5

It's the typical liberal lie. Everything they touch has to be fabricated or over valued by soaking the middle class.

3
7

>> yAccording to the article, Georgia had monthly sales of 1400 before cutting their own tax credit. It would only take 32 states with sales like that to hit the 530k figure. Apparently Georgia is fairly big in terms of population and economy so it may be a bit of an outlier, but given there are 50 states in total it's still not an obviously silly figure."

32 states at 1400 does not make it 530k. Still an order of magnitude off.

1
4

This isn't just a tax-break for the rich. It's an incentive for us to be a cleaner society and lose the heavy dependency we currently have on oil and natural gas. I was really hoping that we could complpete the move to solar and wind by 2020, and as for the point about not having charging stations, this would change if a lot of people got into electric vehicles. If more people demanded the electric vehicles, more and more locations would have the stations.

2
4
Bronze badge

and only electric CARS

you don't get 7.5K on an electric motorcycle either. which if we really wanted to cut congestion (and lower long term health care expenses lol) we'd allow that large subsidy for EV motorbikes. Organs for everyone! :)

2
0
Anonymous Coward

Re: Tax Law - I doubt MANY who qualify for the credit can use it.

who's paying for a Model S or Model X who doesn't have an income tax much higher than the tax liability?

Only someone playing some seriously tricky tax games, or making money thru less than legal means.

in reality, the vast majority are wealthy earners where such a condition does not apply. a 3K tax liability would be what, making only 20K a year? not getting financed on a Tesla with that. so realistically, your objection is like worrying about dragons being exposed to cold weather.

1
0
Bronze badge

Re: ??

Try 1400 cars each month for a year in 32 states:

1400 * 12 * 32 = 537,600 or 530k for the sake of rounding.

4
0

You are misunderstanding the situation. This is a tax credit, not a tax.

The government collects taxes. The government pays tax credits.

Based on projected sales they are projecting paying 4B in tax credits. Eliminating the credit eliminates the expense. Any sales impact caused by ending the subsidy is irrelevant to this calculation.

2
1

Page:

POST COMMENT House rules

Not a member of The Register? Create a new account here.

  • Enter your comment

  • Add an icon

Anonymous cowards cannot choose their icon

Forums

Biting the hand that feeds IT © 1998–2018