* Posts by PrGrPa

2 posts • joined 3 Nov 2017

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


Re: No surprise

"...the[se] tax breaks, on the whole, benefit the better off and are effectively subsidised by everyone..."

I agree on the need to jump start challenger industries. It is very hard to compete against an entrenched and effective product choice without both an appealing product and some sweeteners to make the leap.

The way the USA tax credit works does favour high earners because of their income tax amounts and their ability to consider premium priced vehicles. Though it seems that those high earners are also the biggest contributors to the tax base. Perhaps lower-rate tax payers can console themselves in that their contribution to the choices of the wealthier is modest. http://money.cnn.com/2013/03/12/news/economy/rich-taxes/index.html

The picture is similar in the UK with the current £4,500 government subsidy on the purchase of new extra low emission vehicles. https://www.gov.uk/government/publications/plug-in-car-grant/plug-in-car-grant-eligibility-guidance and the way the tax base is built https://www.theguardian.com/news/datablog/2014/jan/27/how-many-pay-top-rate-of-income-tax-uk


Tesla share crash - not tax credits but earnings?

Nice correlation between the timing of the GOP proposal and the fall in the Tesla share price. Unlikely to be causal though given that Tesla is likely to move out of the applicable 200,000 vehicle limit on the tax credit within the next 6 months. A more likely cause of the share value drop is the unexpected results Elon Musk shared with respect to losses per share and Model 3 production.

This repeal proposal appears to be more typical of GOP traditional lobby support.

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