Proposed Tax Credit Is Slap In the Face For Tesla
Jeremy Johnson's picture

New Tax Credit Bill Is a Slap In the Face of Tesla

We've seen reports on the newest revision of the proposed electric vehicle tax credit bill. There's a few things that are a direct slap in the face of Tesla and other all-in electric vehicle makers. Let's see what it is.

To look at why the latest iteration of the proposed electric vehicle is a slap in the face of Tesla, let's look at one of Tesla's most grounded and realistic analysts, Rob Mauer. Rob has an even temperament and has a very logical and clean way of looking at things. He points out some key things that make the most recently proposed tax credit a slap in the face of Tesla and any other U.S. all-in electric vehicle makers like Rivian, Lucid Motors, and Arcimoto.

The Electric Vehicle Tax Credit at a Glance

Let's take a look at an overview of the electric vehicle tax credit bill as it currently stands:

Timeline: 1/1/2022 through 12/31/2031

$4,000 base credit

Battery Requirements
* 2022 through 2023: 7 kWh
* 2024 through 2031: 10 kWh
* Capable of charging via external source of electricity
* After 2026, requires final assembly within the US

Battery Incentives
* Battery capacity above 40/50 kWh: $3,500

Domestic (Union) Incentive
* $4,500 for being part of an employer sponsored union within a company
* Domestic content: $500 (I believe this means 50% components and batteries made in the U.S.)

Maximum Tax Credit: $12,500

Income Limits (based on modified adjusted gross income for immediately preceding year)
* Join return: $800,000
* Head of household: $600,000
* Individual: $400,000
* Phases out: $200 reduction for each additional $1,000 income over the limit
* $8,000 credit phases out completely after $40,000 additional income over the limit
* $12,500 credit phases out completely after $62,500 additional income

Vehicle Types and Limits
* Sedans under $55,000
* Vans under $64,000
* SUVs under $69,000
* Pick-up trucks under $74,000

There's also a used EV proposed tax credit for vehicles below $25,000 for between $1,500 and $2,500.

Something like the Ford Mustang Mach-E would not qualify for the $4,500 because they are currently manufactured in Mexico.

Why This is a Slap in the Face of Tesla and Other EV Companies

You could have a plug-in hybrid electric vehicle with a 7 kWh battery with a credit of $9,500 ($4,000 base + $4,500 union). That vehicle would probably have a range of 25 miles and that would give this vehicle a higher tax credit than a Tesla all-electric vehicle with a range of 300+ miles.

The U.S. seems to be going all-in on plug-in hybrid vehicles instead of going all-in on electric vehicles. The U.S. government won't even say the name Tesla. This is a slap in the face of Tesla. Supporting plug-in hybrids is not a path forward to renewable energy and reducing the carbon footprint of the world.

The tax credit bill has also been criticized by Honda and Toyota, companies who are not run by UAW (United Auto Workers) - union run organizations within companies.


The proposed tax credit bill benefits hybrid vehicles and unions way too much. The U.S. will fall behind other countries unless it accelerates the transition to electric vehicles faster. Tesla is getting slapped in the face with this bill, but will still succeed as a company due to its superior safety, performance, technology, and range.

What do you think of the latest proposed electric vehicle tax credit bill? Is it a slap in the face of Tesla? Will it get revised from this? Will unions get less of a benefit?

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Jeremy Johnson is a Tesla investor and supporter. He first invested in Tesla in 2017 after years of following Elon Musk and admiring his work ethic and intelligence. Since then, he's become a Tesla bull, covering anything about Tesla he can find, while also dabbling in other electric vehicle companies. Jeremy covers Tesla developments at Torque News. You can follow him on Twitter, Facebook, LinkedIn and Instagram to stay in touch and follow his Tesla news coverage on Torque News.

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This bill shows how out of touch and ill informed out legislative body is. Rob Maurer could not have said it any better. Congress, get educated in EVs and what we need to win this race over China!