Republicans introduce bill that would hand US EV lead to China
Republicans have introduced a bill to eliminate the US EV tax credit in the Inflation Reduction Act, with the effect of slowing US progress on EV manufacturing, thus handing the lead in EV manufacturing to China.
How the Inflation Reduction Act helps American health, economy & manufacturing
The Inflation Reduction Act included hundreds of billions of dollars of climate spending, much of which was allocated to EV tax credits, both for personal and commercial vehicles. These credits were an extension and expansion of the $7,500 EV tax credit first introduced in 2008.
But those credits were limited to 200,000 cars per manufacturer, a cap which some manufacturers had hit and more were going to hit. So the Inflation Reduction Act improved access to those credits, removing the cap and setting up a way for the credits to be available upfront at the point of sale, meaning that lower-income buyers can qualify for the credits and get them immediately instead of waiting to file their taxes.
However, it limited the credits in some important ways as well – namely, by ensuring domestic production of electric vehicles in order to qualify, and setting limits on high-income buyers so the credits go to people who need them rather than those who don’t.
It also added a $4,000 used EV tax credit, which is limited to even lower income groups.
There are ways around some of these limitations and some restrictions have been loosened to allow industry to catch up. But these restrictions have nevertheless fueled a renaissance in American auto manufacturing, with many manufacturers announcing new factory investments in the US.
In fact, since President Biden started his EV push, oer $210 billion has been invested in new or expanded factory projects, which will create EV 250,000 jobs, with more to come.
These commitments stand to make the US into an EV manufacturing powerhouse – we’re already doing pretty well in EV production, largely led by Tesla. But Chinese EV production and demand are rising rapidly and automakers are waffling in the face of it – so government must be clear that we are committed to building this industry long-term.
The IRA also represents the largest climate commitment made by any country in the world, ever, by dollar value. The hundreds of billions of dollars allocated, largely to EV-related tax credits but also to many other climate programs, are a commitment still unmatched by any other country. As an added bonus, the bill actually brings in more revenue than it costs due to tax reforms targeting wealthy corporate and individual tax cheats.
Republicans are lying about their bill’s effects
So, no wonder that republicans, a party that seems to actively oppose anything that would benefit American manufacturing or the environment that Americans live in, would introduce an act to eliminate much of the benefit from the Inflation Reduction Act.
The new act, fittingly called the “ELITE” Vehicles Act (surely named for republicans’ elite fossil fuel donors which it aims to benefit at the expense of everyone else), aims to eliminate the clean vehicle credit for new, used, and commercial electric vehicles.
The act was introduced by John Barrasso, a republican senator from Wyoming who has received $526,425 from the oil & gas industry in this senate election cycle. Not only that, but Wyoming’s main industries are all tied to oil, putting the lie to the assertion that this act is intended to do anything more than benefit an industry which is responsible for millions of deaths per year.
The act’s advocates say that IRA credits – which are limited to lower-income buyers, particularly the used EV credit – are a giveaway to the wealthy (who don’t qualify for them), and that the credits allow Chinese EVs into the US (which they in fact explicitly disallow through the domestic manufacturing provisions mentioned above).
Notably, the act doesn’t do anything to get rid of the $760 billion in subsidies received by polluting industry each year in the US. This could be done through making polluters pay for the pollution they cause. If subsidy elimination were the act’s main concern, then that’s a rather big target that the act ignores – because, of course, the fossil fuel industry wouldn’t like it if their free license to harm the health of Americans were revoked.
The actual effect of rolling back these credits would be to make EVs less affordable for Americans, to ensure that those same Americans have more misery forced on them by pollution from the industry that bribes Barrasso, and to discourage American EV manufacturing and consumer uptake which would have the effect of handing over the lead in global EV manufacturing to China.
How Chinese auto benefits and the US is harmed by repealing the EV credit
Chinese EV manufacturing and consumer demand are both currently skyrocketing, and China is rapidly increasing exports of EVs to overseas markets – particularly Europe at the moment.
But Chinese companies would love to sell EVs in the US, and would likely love to see the government tack $7,500 onto the price of US-built EVs, which would only make Chinese-built EVs much more competitive to the pocketbooks of the American consumer. Barrasso’s bill would do exactly that – make Chinese EVs more competitive, and the US auto industry less so.
And since EVs provide local air quality benefits, which stands to reason and which we’ve already seen in areas with high penetration, reducing EV adoption would also make Americans sicker and fill up American hospitals more.
While Barrasso claims that the bill would do the opposite of the things that it would actually do, it’s hard to believe that anyone would be ignorant enough to believe it would actually have the effects he claims. We don’t think that even he thinks that – we think he’s just playing politics, and saying whatever will make his fossil overlords happy.
In short, John Barrasso, author of the act, is lying to protect the industry that bribes him.
So far, the act has only been introduced in the Senate, and has not made it through committee or to a vote. It is sponsored by 19 republican senators, many of whom come from states with significant oil industry presence. If somehow passed, it would almost certainly be vetoed by President Biden, so it is not likely to make it into law under the current government (though that could change in November, which is something to keep in mind when filling out your ballots).
But even if it doesn’t make it into law, it still functions as a way for republicans to show their intent – to cost you money, to harm your health, and to hand the keys of the future of the auto industry over to the country which the US considers its main geopolitical rival.
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Here we compare the specs of the new Tesla Model Y (Chinese version) to the newly unveiled Xiaomi YU7, a vehicle dubbed the ‘Tesla killer’.
For years, we laughed at people using the term ‘Tesla killer’ for new electric vehicles. To this day, even as Tesla’s sales are declining, it’s a bit dumb to use the term since no single EV is going to “kill” Tesla.
However, there’s one that is as close to do it as we have seen so far.
Earlier this year, we reported on how Xiaomi’s first electric vehicle, the SU7, had a major negative impact on Tesla’s Model 3 sales in China.
At the time, we reported that the bigger concern for Tesla was that the Chinese electronics giant was now planning to launch a new EV, the YU7, aimed at competing against Tesla’s popular Model Y.
The Xiaomi YU7 was unveiled today, and we can now provide a side-by-side specs comparison that highlights Tesla’s problem in China.
Tesla Model Y vs Xiaomi YU7
The only thing that is missing about the YU7 as of the time of writing is the price, but it is expected to be very similar to Model Y and even likely to undercut by a bit.
| Specs | Tesla Model Y RWD | Tesla Model Y Long Range AWD | Xiaomi YU7 Standard (RWD) | Xiaomi YU7 Pro (AWD) | Xiaomi YU7 Max (AWD) |
|---|---|---|---|---|---|
| Launch Date | January 2025 | January 2025 | July 2025 (expected) | July 2025 (expected) | July 2025 (expected) |
| Price (CNY) | ¥263,500 | ¥303,500 | ~¥250,000 (est.) | Not announced | Not announced |
| Price (USD) | ~$36,600 | ~$42,200 | ~$34,700 (est.) | Not announced | Not announced |
| Dimensions (L x W x H) | 4,797 x 1,920 x 1,624 mm | 4,797 x 1,920 x 1,624 mm | 4,999 x 1,996 x 1,600 mm | 4,999 x 1,996 x 1,600 mm | 4,999 x 1,996 x 1,600 mm |
| Wheelbase | 2,890 mm | 2,890 mm | 3,000 mm | 3,000 mm | 3,000 mm |
| Weight | 1,921 kg | 1,992 kg | Not specified | 2,405 kg | 2,405 kg |
| Powertrain | Single motor RWD | Dual motor AWD | Single motor RWD | Dual motor AWD | Dual motor AWD |
| Power Output | Not specified (est. 200-250 kW) | Not specified (est. 350-400 kW) | 235 kW (315 hp) | 508 kW (681 hp) | 508 kW (681 hp) |
| 0-100 km/h | 5.9 s | 4.3 s | 5.8 s | 4.3 s | ~3.2 s |
| Top Speed | 201 km/h | 201 km/h | 240 km/h | 253 km/h | 253 km/h |
| Battery Type | LFP | NMC | LFP | LFP | Li-ion ternary (CATL) |
| Battery Capacity | ~62.5 kWh | ~80 kWh | 96.3 kWh | 96.3 kWh | ~101.7 kWh |
| Range (CLTC) | 593 km | 719 km | 835 km | 750 km | 760 km |
| Charging Architecture | 400V | 400V | 800V | 800V | 800V |
| Seating Capacity | 5 (7 optional) | 5 (7 optional) | 5 | 5 | 5 |
| Key Features | – Updated design – Rear seat touchscreen – FSD-capable | – Same as RWD – Higher performance | – Panoramic HUD – HyperOS – Larger cabin | – Same as Standard – Higher performance | – Top-tier performance – Premium interior (assumed) |
| Autonomous Driving | FSD with AI4 computer | FSD with AI4 computer | Nvidia Thor chip (700 TOPS) | Nvidia Thor chip (700 TOPS) | Nvidia Thor chip (700 TOPS) |
These specs show that the vehicles are extremely similar. The main difference is that Xiaomi packs a lot more batteries into the YU7 than Tesla puts into the Model Y, resulting in a significant difference in range.
To be fair to Tesla, it still dominates in efficiency as it does more with fewer batteries, which is an important skill to have. However, most customers don’t care about that and want a longer range. They don’t care how you make it happen.
Another big difference is the design.
As we previously reported, the Tesla Model Y design refresh looks similar to other Chinese EVs.
Based on the online reception, the Model Y is viewed as having a more tired design that is not as luxurious as the YU7.
That’s particularly true of the exteriors.
It’s a similar situation in the interior, but Xiaomi also outshines Tesla here with more technology, like display along the dash:
Both vehicles feature a large center display where most of the controls are located.
Electrek’s Take
I think Tesla is in trouble in China. The competition is impressive and there are vehicles that clearly directly target Model Y, Tesla’s bread and butter, and there’s no better example than this one.
The only thing missing is pricing, but if it’s priced as expected, which is like the SU7 to the Model 3, it will make it a no-brainer for most buyers.
Also, Xiaomi often gets mentioned as a ‘Tesla killer’ because the vehicles are not only ultra competitive with Tesla, but it is also producing them in high volumes.
SU7 outsold the Model 3 within a year of launching. The YU7 is coming to market within the next 2 months, and it should reach impressive volumes that are going to put pressure on Tesla’s Model Y sales by the end of the year.
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Environment
Top $TRUMP holders head to crypto dinner with president that Democrats call ‘orgy of corruption’
Jonathan Raa | Nurphoto | Getty Images
Nick Pinto is a marketing director at his family’s law firm in New Jersey. He’s also a crypto trader who spent enough money on Donald Trump’s meme coin to win a spot at a private black-tie dinner with the president scheduled for Thursday night.
“I was kind of early in bitcoin and ethereum, so I’ve always been trading crypto,” said the 25-year-old Pinto, who claims he finished number 72 on the leaderboard for the token contest. “Once I saw the announcement that Trump was releasing a coin, I immediately started to purchase it.”
Pinto said in an interview that he spent half a million dollars on the $TRUMP meme token in order to attend the dinner, which is being held at President Trump’s private golf club in Potomac Falls, Virginia, near Washington, D.C. Pinto shared screenshots with CNBC that appear to back up his claim.
The $TRUMP coin, which has no attached asset or underlying value, was launched just ahead of the president’s inauguration in January and has drawn heavy scrutiny from Democratic lawmakers who say President Trump is profiting from his position of power.
The dinner was announced last month and promised to reward the top 220 token owners with “the most exclusive invitation in the world.” The top 25 finishers were also told they would get a private reception with the president, as well as a “special VIP tour.”
Democratic senators called the competition a blatant example of “‘pay to play’ corruption” — the coin jumped 50% after the dinner announcement. Earlier this week, the Senate advanced a Trump-backed crypto regulation bill called the GENIUS Act after getting enough Democratic support to clear a potential filibuster.
Guests for Thursday night’s dinner were required to complete a background check, according to a copy of the invitation viewed by CNBC. Attendees were instructed not to arrive before 5:30 p.m., with the dinner starting at 7 p.m. and expected to last three hours.
Pinto doesn’t know what his investment in $TRUMP will get him other than the dinner. He said he thinks the tokens will be usable in a digital Trump golf game that was announced in December and is expected to launch next month, according to a press release.
“There’s a few things that I want to ask him,” Pinto said. “I definitely want to find out if he’s going to want to use this coin in the game. That’s probably my top question, because not many people know about that game.”
The Trump coin team didn’t immediately respond to a request for comment.
Because crypto wallets are pseudonymous, most participants in the competition appeared only as three- to four-letter usernames linked to cryptographic wallet addresses. Many of the winners are tied to international exchanges, according to blockchain analytics firm Inca Digital, raising concern that non-Americans may be paying for the opportunity to try and influence the U.S. president.
While Pinto is going public about his participation, most of the identities tied to top wallets are unknown. Blockchain data shows that a majority of the top entrants used offshore exchanges barred to U.S. residents. An analysis by Bloomberg revealed that 19 of the top 25 wallets, and more than half of the top 220, are almost certainly owned by individuals operating outside the U.S.
The competition drew an estimated $148 million in purchases from supporters around the world, a massive fundraising haul for a digital asset launched just months ago. Among those attending is Justin Sun, the Chinese-born founder of the TRON blockchain, who confirmed this week that he is the contest’s top-ranked investor.
At current prices, Sun’s stake in $TRUMP is now worth more than $20 million. Sun was also one of the first major backers of World Liberty Financial, the Trump family’s crypto venture, buying at least $75 million of its native token “WLFI.”
In 2023, U.S. regulators accused Sun of illegally selling unregistered securities and artificially inflating token prices. A month into Trump’s second White House term, a federal court filing showed the SEC was in settlement talks with Sun to resolve the civil fraud charges.
Final leaderboard
MemeCore, a Singapore-based crypto network that was vocal in its quest to secure a spot at the Trump dinner, landed in second place with an investment of around $19.7 million, according to a post on X that the company later deleted. MemeCore didn’t immediately respond to a request for comment.
Some buyers didn’t make the cut.
Freight Technologies, a Houston-based logistics company, said it spent $2 million on $TRUMP tokens as part of what it called a strategic push to “champion fair and free trade” across the U.S.-Mexico border. The company still finished in 250th place. Freight trades on the Nasdaq as a penny stock and has a market cap of about $6.5 million.
The final leaderboard was calculated using a time-weighted formula that factored in both the size and duration of each participant’s holdings. That means early buyers who held onto their tokens consistently, like Pinto, could outrank bigger last-minute spenders.
Investors in $TRUMP, like with other meme coins, have to be prepared for big ups and downs.
Immediately after its launch in January, the Trump coin spiked to a $15 billion market cap before crashing within days. It’s currently worth about $2.1 billion.
That volatility has created stark winners and losers. Blockchain data shows that more than $5.2 billion in profits flowed to the top wallets, while over 590,000 wallets — mostly small retail traders — collectively lost nearly $4 billion.
Since January, more than $324 million in trading fees have been routed to wallets tied to the project’s creators, according to Chainalysis. The token’s code automatically directs a cut of each transaction to these addresses, allowing the team to profit from ongoing activity. The blockchain analytics firm stopped tracking the president’s meme token about two weeks ago, citing a need to refocus resources on paying clients.
The Trump family has reaped enormous financial benefit. Roughly 75% of proceeds from World Liberty Financial and more than 80% of profits from the meme coin have gone directly to the Trump Organization and affiliated entities. The project has also generated hundreds of millions of dollars in trading fees.
Senator Chris Murphy, D-Conn., has introduced legislation that would ban sitting presidents from profiting off meme coins while in office.
In a press conference hours before the dinner, Murphy warned that “just because the corruption is playing out in public where everybody can see, it doesn’t mean that it isn’t rampant, rapacious corruption.” He called tonight’s event “maybe the most corrupt, of all of the corruption.”
Sen. Elizabeth Warren, D-Mass., went further, describing the gathering as “an orgy of corruption” and accusing Trump of using the presidency “to make himself richer through crypto.” She called for changes to the GENIUS Act that would bar any president from profiting off stablecoin ventures.
With Republicans in control of both chambers of Congress, Democrats have limited ability to force action.
In response to CNBC’s questions about the dinner, Deputy White House Press Secretary Anna Kelly said, “The president is working to secure good deals for the American people, not for himself,” adding that he “only acts in the best interests of the American public.”
Pinto, who paid $500,000 for his invitation and still holds most of his tokens, said the risk is worth it.
“I didn’t put in more than I’m willing to lose,” he said. “I’m fine if it goes to zero.”
WATCH: Bitcoin surges to new record high above $111,000: CNBC Crypto World
California and 16 other states have sued the government for illegally withholding $5 billion in funds that Congress earmarked for EV charging, calling the action “another trump gift to China.”
Update, May 22: After the initial lawsuit was filed on May 7th, a number of nonprofits including Sierra Club, Earthjustice, NRDC, Southern Environmental Law Center, and Plug in America joined the lawsuit today. Also, the Government Accountability Office determined today that the seizure of funds was illegal.
The federal NEVI (National Electric Vehicle Infrastructure) program was established by the Infrastructure Investment and Jobs Act (IIJA), otherwise known as the Bipartisan Infrastructure Law, pushed for and signed by President Joe Biden.
Among other things, the IIJA dedicated $5 billion in funding to expanding EV chargers, in order to give more Americans access to EV ownership, and allow them to unlock the fuel cost and health savings that EV owners, and communities with high EV penetration, enjoy.
Since then, every state has submitted a plan and that money has gotten assigned to projects around the country in various levels of completion, with several charging stations already open.
The NEVI program was even the main driver of Tesla opening up its charging port and creating the NACS standard, due to the law’s requirement that federal funding can only go to charging stations that have open access to multiple brands of vehicle. Tesla’s Superchargers used to be open only to Teslas, but after this law passed, Tesla started opening them up to other brands.
And wide adoption of the NACS standard by the industry promises to fix a lot of the problems with EV charging.
So, NEVI is a great program, and it’s helping Americans to save on fuel and maintenance costs, reducing barriers to charging, and making the world cleaner for everyone who breathes air.
So of course, the enemy of America currently occupying the White House (despite there being a clear Constitutional remedy for this crisis) opposes it.
In February, the Federal Highway Administration (FHWA), at the behest of convicted felon Donald Trump, froze funding for the NEVI program, even though that funding was already allocated by Congress for this purpose. Who knew a felon would break the law?
Now, states are pushing back against the illegal funding freeze, as 17 states, led by California, Colorado and Washington, are suing the FHWA to free up the funds that were allocated to them. Joining the lawsuit are Arizona, Delaware, Hawaii, Illinois, Maryland, Minnesota, New Jersey, New Mexico, New York, Oregon, Rhode Island, Wisconsin, Vermont, and the District of Columbia.
California Governor Gavin Newsom and Attorney General Rob Bonta laid out their argument in a press release by the California Governor’s office.
Among those arguments is something we’ve mentioned many times here on Electrek: that republican efforts to diminish the US EV industry are a “gift to China,” who have well and truly taken the lead in the global EV industry, and other countries – particularly the US – are just not doing enough to keep up.
When America retreats, China wins.
President Trump’s illegal action withholding funds for electric vehicle infrastructure is yet another Trump gift to China – ceding American innovation and killing thousands of jobs.
Instead of hawking Teslas on the White House lawn, President Trump could actually help Elon – and the nation – by following the law and releasing this bipartisan funding.
-California Governor Gavin Newsom
Another of President Biden’s laws, the Inflation Reduction Act, was an effort to increase investment in the EV industry in the US – and did so while also lowering the deficit. It worked extremely well, leading to hundreds of billions in investment and hundreds of thousands of jobs in American EV manufacturing. Certainly much more effective than the unwise tariffs that both President Biden and Mr. Trump have supported.
However, as one might expect from an enemy of America, Mr. Trump has opposed that law as well. After he begged the oil industry for a billion-dollar bribe to harm EVs during his presidential campaign (where he also repeatedly promised to raise inflation for Americans), his republican party now thinks they have the votes to inflate the price of EVs by $7,500 – on top of the inflation Mr. Trump has already caused on electric and non-electric models alike.
Oddly, despite Mr. Trump’s clear opposition to the well-being of Americans, and particularly to the well-being of the American auto industry, Tesla CEO Elon Musk, perhaps America’s most high-profile auto CEO, donated hundreds of millions of dollars to this anti-EV candidate. He has used tortured logic to claim that raising the price of his products by $7,500 relative to the competition won’t hurt his business, but that’s just wrong.
As Governor Newsom points out in his quote above, this situation seems puzzling. While Mr. Trump did improperly utilize government property to create a bizarre ad for his largest political donor, his policy proposals so far – which Musk claims he “loves” – have generally been directed towards harming Tesla and other EVs. The money from the NEVI program could go a long way towards filling the gaps in EV charger buildout around the country, making Teslas more usable for Americans who don’t live in areas where chargers are easy to come by.
Pausing that funding not only puts charger plans into chaos (something Musk is no stranger to), it also means that Tesla can’t use money that it created an entire charging standard just to get a piece of. And it’s not the only time the squatter in the White House has made EV charging harder, as he previously tore out 8,000 paid-for EV chargers, causing waste and higher fuel costs for government vehicles simply out of his seemingly infinite spite for the country which he’s currently illegally running into the ground.
The lawsuit requests that a court stop Mr. Trump’s illegal actions and permanently halt the FHWA from withholding these funds.
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