Tesla may be officially having the worst day ever. One day after announcing its worst quarter in history, in which it burned a record $1.4 billion in cash (which is about $15.5 million every single day, btw)…
…a couple of GOP Representatives had to come along and propose a tax bill that would eliminate a key component on Tesla’s business plan: taxpayer subsidies. As SF Gate notes, each electric vehicle purchased in the U.S. is currently eligible for a $7,500 tax credit…a credit that has long served to artificially prop up a business that would likely not exist but for the generosity of taxpayers.
Tesla Inc., General Motors Co. and other major carmakers pushing to boost U.S. electric car sales were dealt a blow by House Republicans who on Thursday proposed eliminating a $7,500 per vehicle tax credit that has helped stoke early demand for the still small segment of the U.S. auto market.
If adopted, the repeal would take effect after the 2017 tax year, according to a summary of the bill released Thursday by the House Ways and Means Committee as part of a sweeping overhaul of the U.S. tax code that would eliminate some deductions and cut the corporate tax rate to 20 percent. The Senate is crafting its own version.
Automakers from Detroit to Yokohama are betting big on an electric future with plans to spend billions of dollars on new pure-electric models to be rolled out in the coming years despite limited sales to date. Availability of the credit has been capped at the first 200,000 qualifying vehicles sold by each manufacturer. No automaker has reached that cap yet.
Of course, it’s not just Tesla that would be impacted by such a move as lower-end electric vehicles, like the Chevy Bolt and Nissan Leaf, target a consumer base that is even more dependent on tax subsidies to purchase vehicles that are not economically viable on a standalone basis and, quite ironically we might add, actually create more pollution than combustion-engine vehicles.
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