Tesla CEO Elon Musk Says US Should Get Rid of EV Subsidies

December 08, 2021

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by Hyunjoo Jin (Reuters/Times Drive) The billionaire entrepreneur is escalating criticism about the administration and Democrats for a proposal to give union-made, U.S.-built electric vehicles an additional $4,500 tax incentive. Tesla and foreign automakers do not have unions at their U.S. factories.

Tesla Inc CEO Elon Musk said on Monday that the U.S. Congress should not approve the Biden administration's bill to boost subsidies for electric vehicles (EVs), saying the proposal would worsen the country's budget deficit.

The billionaire entrepreneur is escalating criticism about the administration and Democrats for a proposal to give union-made, U.S.-built electric vehicles an additional $4,500 tax incentive. Tesla and foreign automakers do not have unions at their U.S. factories.

"Honestly, it might be better if the bill doesn't pass," Musk said at the WSJ CEO Council Summit.

"I'm literally saying get rid of all subsidies," he said, adding that the government should I think just try to get out of the way and not impede progress."

He also reiterated opposition to a proposal by Democrats to tax billionaires. READ MORE

Tesla’s Elon Musk Really Doesn’t Like Biden’s Spending Bill (Barron's)

2nd Gear: Pete Buttigieg Enters The Arena -- Tesla CEO Elon Musk has thoughts about federal EV subsidies (Jalopnik)

Elon Musk Calls for End to Government Subsidies Now That They’ve Made Him Rich: "I’m literally saying get rid of all subsidies," the tech CEO said at an event this week. (Gizmodo)

Elon Musk doubles down on ending 'subsidies' as competitors now reap more benefits (CNN; includes VIDEO)

Elon Musk Has It All Wrong on Subsidies (Bloomberg/Washington Post)

Elon Musk slams Biden’s plan to spend government money on electric vehicles (CNBC)

Elon Musk says federal government should ‘get rid of all subsidies’—despite Tesla receiving billions in support (Fortune/Yahoo!)

Elon Musk says the US should ‘get rid of all’ government subsidies -- He also said the Biden infrastructure plan should get canned (The Verge; includes VIDEO)

Why Elon Musk is no longer a fan of government subsidies for electric cars (Quartz)

Opinion: Elon Musk’s diatribe against subsidies ignores the history of the tech industry (Washington Post)

EU trade chief Valdis Dombrovskis raised EU concerns over a proposed U.S. tax credit for electric vehicles (Automotive News Europe)

Dombrovskis to lawmakers: EV tax credit ‘discriminates’ against EU (World Trade Online)

Manchin Rejects Biden’s EV Tax Credit as ‘Ludicrous’: Senator’s remarks come as Democrats seek to expand incentive; Money should be spent on hydrogen instead, Manchin argues (Bloomberg)

Excerpt from Gizmodo: “It might better if the bill doesn’t pass. The federal budget deficit is insane.”

If you are a big businessman like Musk, then running at a loss is bad. (Though strangely, his companies have been unprofitable even as his wealth has exploded. Funny that.) But for the federal government, which can literally print money, the deficit is merely a boogeyman that politicians and people looking to influence politicians can bandy about. The government’s balance sheet is about more than money in and money out.

Musk went on to call the electric vehicle and charging infrastructure subsidies in the bill “unnecessary.”

“Do we need support for gas stations?” he rhetorically asked. (Also for the record, governments subsidize gas bigly, both directly and indirectly.) “We don’t. So there’s no need for supporting a charging network. I would delete it. Delete. I’m literally saying get rid of all subsidies.”

So either Musk hasn’t thought about this bill and is talking out his ass or he’s thought a lot about this bill and is, from the sounds of it, losing sleep over it. The tech CEO has relied on government contracts and subsidies for all his businesses. SpaceX? Government contracts and subsidies. Tesla? Government subsidies and loans. Solar City? Folks, it’s subsidies. A 2015 Los Angeles Times deep dive estimated Musk received $4.9 billion in government subsidies, a number that has almost surely risen since then.

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Sadly for Musk, it’s too late to “delete” charging infrastructure subsidies, they were included in the bipartisan infrastructure bill already signed into law. With respect to EVs, Build Back Better offers $7,500 rebates for buyers and another $5,000 if the vehicle is made in a union shop. Tesla is not unionized and Musk is virulently anti-union. Major American automakers do feature large, unionized labor forces, though. It’s easy to see why the $5,000 top-up would piss off Musk even if, you know, unions are good for everyday people and democracy.

You know who else hates the EV subsidies in the Build Back Better Act? Sen. Joe Manchin. You know who gives the most money to Manchin? The fossil fuel industry. And what do that industry and Musk have in common? They’re both incumbents. Granted, the fossil fuel industry has a century-plus headstart in tying transportation to gasoline. But Musk’s company has a lead over other automakers in terms of tying it to electricity. Cutting off subsidies would allow Tesla to further corner market share, tying the fate of electrification to his company ever tighter. READ MORE

Excerpt from CNN: Musk's companies have previously embraced government spending.

Tesla received a $465 million loan from the Department of Energy in January 2010, before its initial public offering that summer. Tesla also benefits from selling regulatory credits to other automakers, which help it be profitable.

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"It has always been Tesla's view that all subsidies should be eliminated, but that must include the massive subsidies for oil & gas," Musk tweeted last month.

The world spends $423 billion subsidizing fossil fuels, according to the United Nations. US subsidies are roughly $20 billion a year.

Excerpt from Quartz: While Musk has a penchant for provocation, Tesla is far from the only automaker to speak out against the proposed EV subsidies, says Michelle Krebs, an executive analyst with Cox Automotive, who noted that industry opposition to the Biden bill has been “going on for weeks.” Moreover, Tesla and its customers have collected government subsidies in the past, but don’t stand to gain much from Biden’s social spending bill. READ MORE

Excerpt from Bloomberg: “There is a waiting list for EVs right now, with the fuel prices, but they still want us to throw a $5,000, or $7,000 or $12,000 credit for us to buy electric vehicles,” Manchin, a West Virginia Democrat, said during a Senate budget hearing Thursday. READ MORE