Tesla reportedly supports the Trump administration’s plan to kill the $7,500 federal tax credit for electric vehicles – something in direct contradiction to Tesla’s original mission to accelerate the entire industry’s transition to electric transport.

Elon Musk, who has both financed and “fully endorsed” Donald Trump, has walked back much of his prior messaging around the need to accelerate the transport and energy sector’s transition to sustainability to address climate change.

In fact, during Trump’s prior administration, Musk was part of his “business council”, but he resigned after Trump pulled the US out of the Paris climate agreement.

Musk has now made it clear that he believes the “woke mind virus” is a bigger threat to humanity than climate change.

The CEO even supported Trump when he said he plans to remove the $7,500 tax credit for electric vehicles once he is back in power. That’s despite Tesla having lobbied for the credit. The incentive has been supporting Tesla’s sales in the US over the last few years.

Musk even laid out a scenario where removing the tax credit would hurt Tesla, but he believes it would hurt other automakers more – removing some of the competition. That’s a direct contradiction to what Musk has said many times in the past, which is to encourage the entire auto industry to go electric.

Even more recently, the CEO has complained that the main problem with EV adoption is the cost being to high – something that the tax credit is directly addressing in the US.

Tesla now supports removing the tax credit

These days, it’s hard to separate Musk and Tesla. Even though he is technically only CEO and minority shareholder, it is widely believed that he controls the board, and, therefore, he is able to do anything unchecked at Tesla.

This is actually what led to the judge’s decision in his CEO compensation case earlier this year.

Now, Musk’s position on the tax credit that Tesla lobbied hard for is also Tesla’s position.

According to a new Reuters report, Trump’s transition team is reportedly already strategizing about how to remove the EV tax credit:

President-elect Donald Trump’s transition team is planning to kill the $7,500 consumer tax credit for electric-vehicle purchases as part of broader tax-reform legislation, two sources with direct knowledge of the matter told Reuters.

The report states the energy transition team is led by Harold Hamm, an oil billionaire, but that they have consulted with Tesla, which is reportedly backing the move:

Ending the tax credit could have grave implications for an already stalling U.S. EV transition. And yet representatives of Tesla – by far the nation’s largest EV seller – have told a Trump-transition committee they support ending the subsidy, said the two sources, who spoke on condition of anonymity.

The Trump administration would have to get Congress’s approval to remove the EV incentive.

Electrek’s Take

Like I wrote in my post about selling my Tesla position, the main reason I can’t be involved with Tesla anymore is that it is moving away from its mission.

There’s no better example than this.

Elon is willing to slow down the entire US EV industry as long as Tesla can come out on top in the next few years.

A source familiar with Tesla’s policy team suggested that it could be a negotiating strategy. Tesla may know it can’t save the tax credit so it is agreeing with Trump in order to have a bit more credibility on other matters, like the battery production credits that Tesla has been enjoying under Biden’s IRA.

But that could be a stretch, and in my opinion, it is not worth supporting something that will undoubtedly result in lower EV sales in the US, a country already way behind the rest of the world in EV adoption.

Also, it’s fair to note that this move should help Tesla in Q4 as the threat of removing the tax credit is resulted in surges in sales in the past to take advantage of it before it goes away.

It comes as Tesla is trying to achieve record sales in Q4 in order not to be down in deliveries for the entire year.