No, for crying out loud, killing EV subsidies will not help Tesla. Many have said that Musk’s support of ending EV credits will somehow help Tesla against the competition. Tesla’s competition is gas cars, not other EVs. Sometimes, a dumb idea is just a dumb idea.

No, for crying out loud, killing EV subsidies will not help an EV company



by mafco

10 comments

  1. I thought Tesla is now too big for subsidies, whereas companies with less EV sales can still get them. So, it does promote other EV sales over Tesla.

    So, removing subsidies does help Tesla.

  2. This is just factually incorrect. Tesla competes against all auto makers. As more companies get into the EV game, they need the same subsidies that propped tesla up so they can get to a level playing field. Tesla is basically killing the competition of EVs in the womb and hoping as ICE is phased out more and more, they’ll be the main provider left.

    And that’s just their auto side. When they start pushing this more on the software and battery side… it’ll be obvious

  3. Let me guess – this article was put out by the Elon Musk propaganda machine.

    I guess he is correct. The subsidies aren’t going to help Tesla. There is no way in Hell I would buy one even if they paid me to take one.

  5. it’s called pulling up the ladder behind you. 

  6. If you are in trying to create government buying power like the petroleum industry, this is how it’s done.

  7. It will not help Tesla, but it’s going to hurt other ev manufacturers. It’s a move that is biased towards Tesla.

  8. Tariffs will raise the cost of gasoline substantially. A lot of oil comes from Canada. Hint. Hint.

  9. This simply is not true the auto makers are finding it very difficult to break through Tesla’s near monopoly on EVs. Without the subsidies it will be even more difficult

  10. The author makes a very strong and compelling case in his article. I tend to agree with him that in the short-term removing the $7,500 incentive for an EV purchase will adversely affect Tesla’s profitability and likely cause the stock price to halve, *ceteris paribus.*

    However, I believe he is missing an important point that directly undermines his thesis. Specifically the cost curves for EVs are different than the cost curves for ICE vehicles. Globally, the cost to manufacture EVs continue to drop significantly. Globally, the cost to manufacture ICE vehicles has remained flat, or in some cases have risen because of labor costs, supply chain disruptions, and possibly tariffs.

    As EV manufacturers continue to ride down their cost curves, Tesla will soon be manufacturing EVs that are cheaper to produce than any ICE vehicles. Teslas most significant threat therefore is not legacy ICE incumbents, which will need government subsidies to convert their manufacturing footprint to EVs at scale, but Chinese EV companies like BYD, which are also riding down cost curves at equally large — if not larger — economies of scale than Tesla.

    The Chinese car market has been crushing for OEMs like Volkswagen and GM, which had earned sizable profits previously, precisely because Chinese EVs are ever more cost competitive to non-Chinese ICE vehicles. That effect will continue to spread globally, especially as Chinese brands build out manufacturing footprints globally.

    The ICE OEMs incumbent leadership realizes they are late to market. They likely hope that removal of $7,500 credit will be just the jolt they need to juice profits for a few quarters to ensure their golden parachutes get them out before their businesses’ profitability full collapses.

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