In light of Tesla and its CEO Elon Musk’s support of ending EV credits in the US, many have said that this will somehow help Tesla against the competition. But it won’t, and here’s why.
This line of thinking seems to have become common in recent weeks, with the general public seeming desperate to tease some rationality out of the irrational choice of a business asking the government to make its products $7,500 more expensive.
The argument seems to go that because Tesla is the best at making EVs, and can make them with better margins than other companies, removing subsidies will reduce everyone’s margins to the point where they aren’t profitable, except Tesla, which means that all the competition will be taken out of the market and Tesla will be the only ones able to make EVs.
It’s a somewhat attractive argument for a long-term-focused investor who might feel attracted to the idea that Tesla will somehow become the only EV company, and who are bullish on EVs succeeding in the market no matter what happens, thus leading to the thought that Tesla will, in the long term, own 100% of the US car market.
But there are a lot of underlying assumptions here which seem unlikely to pan out.
A Tesla EV monopoly relies on lots of assumptions
First, this assumes that other companies will not invest in EVs if their margins falter. But we’ve already seen other companies invest money into EVs when they don’t have positive margins yet, because that’s how businesses work – when you invest in something new, you often take losses for a while before eventually reaping gains. This happened with Tesla itself, so we should not be surprised if it can happen with other companies.
Second, where is the money coming from? For startups, perhaps they will have a harder time finding money – unless they’re able to capture investors who are bullish on the future of EVs and willing to take losses, which Tesla has shown definitely do exist (especially in light of this very story, where TSLA investors are asking to have their margins cut based on a shaky premise that it will help the business).
But for big established auto businesses, the money for the EV fund is coming from… their gas car sales, which will continue, and whose profitability wouldn’t be affected by a change in EV credits (or in fact could conceivably go up, as removal of the EV credit means that gas cars could raise prices as TCO of competing EVs goes up).
Tesla, however, doesn’t have that other source of money. Its money comes from EV sales, and its margins have already dropped from their record highs at the peak of COVID-related auto supply issues. In Q3 2024, Tesla made $6,886 per vehicle – which I hope I don’t need to remind the reader is a smaller number than $7,500.
Now, not all of Tesla’s vehicles come along with the $7,500 credit, so after taking that into account, Tesla would likely have still made money. But you can see how a drop of $7,500 worth of margin in most of the vehicles Tesla sells would cut profits by a lot – which means less money to reinvest in growth, less money to chase other pie-in-the-sky projects that are inflating the stock price right now, and less chance of Tesla becoming the sole EV provider for the Western world as some investors seem to think might happen.
And third, for this to be true then we must also think that people will accept a transportation monopoly long term. Not only do consumers choose non-Tesla EVs for many reasons – aesthetic concerns, brand loyalty, aforementioned distaste for Musk or Tesla, desire for certain features, etc etc etc – but we also like to say that a free market naturally abhors a monopoly, or that regulators will do something about monopolies when they crop up.
But the bigger problem here is: all of these assumptions focus on EVs, and not on Tesla’s real competition.
Tesla’s competition is gas cars, not other EVs
Besides, the whole thing is wrong to begin with about what Tesla’s “competition” actually is.
It’s common for people to compare EVs against each other, rather than against gas vehicles. This can be for several reasons – similarity, of course; the assumption that buyers have already decided on a powertrain and will shop within that powertrain, instead of cross-shopping; and perhaps aided by EV-focused publications like ourselves that tend to compare EVs against each other because, frankly, we don’t care about gas cars and see no reason anyone would should buy one, so why bother reviewing them when they’re all terrible anyway?
But the reality is that the vast majority of the US car market does not consist of electric vehicles. Nine out of every ten cars sold in this country are still powered by oil – but only about one out of every twenty cars sold in the US are EVs sold by a company not named Tesla.
So if Tesla wants to grow its sales, that 90+% of gas car market share seems like a lot bigger target than the ~5% – especially given that much of those 5% have indicated their disinterest in buying a car associated with Elon Musk.
So, how does increasing the price of the 5% of non-EV Teslas help Tesla at all, especially when Tesla’s prices would also go up? And when the vast majority of its competition will not go up in price?
Inevitably, this thinking only leads to a “big fish in a small pond” result, even in the most optimistic case. An EV market where prices all go up by $7,500 would inevitably shrink in the short term, but even if it didn’t, and if all other EVs were forced out of it (which is unlikely), Tesla would have access to 5% more of the market, not 90% more. Maybe that would be a nice change from Tesla’s falling sales in a growing EV market this year, but it’s hardly justification for a market cap that’s higher than the rest of the industry combined.
So even if all this magical thinking about a Tesla EV monopoly does turn out to be accurate, it still doesn’t represent a strike against the real competition for Tesla, nor does it target the part of the market that could result in real long-term growth for the company. (And ironically, the one place where Tesla could have had a near-monopoly is charging, where the charging team executed a coup turning the entire industry to Tesla’s plug… and then Musk swiftly fired everyone, causing total chaos and losing lots of talent to competitors).
But eliminating subsidies would help EVs… if gas subsidies died too
In the past, Musk has pointed this out and correctly said that EVs would be more competitive on price if externalities from gasoline vehicles were taken into account.
In Musk’s recent advocacy, he seems to forget half of that equation (just as he seems to have forgotten how climate change works). We have not seen him push for removing fossil car subsidies, just EV subsidies.
So what Musk has proposed here is not only to make all of his own products $7,500 more expensive when compared to their direct competition, but his allies want to make the competition even cheaper, leading to a $15,000 swing in comparative pricing between the two. No normal business benefits from this (Veblen goods notwithstanding).
Finally, lest we forget, the company’s mission is “to accelerate the advent of sustainable transport” – not to drive other EVs out of the market and in the vain attempt to ensure that EVs remain a niche market that Tesla can dominate while gas cars are allowed to flourish with the support of a man whose money has effectively all been made by electric vehicle sales.
So, either all of Tesla is mystified by the inscrutable brilliance of its fearless leader Elon Musk and has been making poor decisions, throughout its entire existence and across its sales territories, all directed in the past by Musk himself, and only now has it started to recognize the genius behind making its products more expensive for no reason, but only in one market… or maybe, just maybe, this new idea to remove an incentive that has brought the company literally billions of dollars is actually just as idiotic as it seems on its face.
B… but… Elon’s not dumb though!
I believe that the reason people are twisting themselves into knots over this is because they just can’t believe that Musk would have such a stupid idea. They look at their past understanding of him as an intelligent individual and think that there must be some sort of secret plan.
But sometimes, a dumb idea is just a dumb idea. Lowering Tesla’s margins is simply not a good business move.
The fact that people think it would be is simply an indicator of just how detached from reality Musk and his ilk have become. This has been readily apparent for quite some time now – but, if you spend all your time on a platform where a chain of emojis passes for a clever idea and correctness is decided by whoever has more successfully weaponized their fanbase towards repeatedly clicking a digital heart on each of the myriad bot accounts they have access to, you might have missed it.
There, when Musk has a bad idea, he can’t be corrected, because he has isolated himself from anyone who would correct it. Instead, he only hears from people who think that he’s the smartest man in the world – and thus, that every idea of his must be good in some way. What a boost to the ego that must be.
So they will desperately reach for straws to find any sort of rationality in actions that are inherently irrational, and so easy to see that they’re irrational. And in a world where truth seems to matter less than ever and opposites are accepted as reality, you end up with a lot of people echoing the absurd idea that a business will benefit by losing money.
But it just won’t. So please, stop saying it will.
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BMW Motorrad’s futuristic electric scooter just got its first real refresh since beginning production in 2021. The BMW CE 04, already one of the most capable and stylish electric maxi-scooters on the market, now gets a set of upgraded trim options, new aesthetic touches, and a more robust list of features that aim to make this urban commuter even more appealing to riders looking for serious electric performance on two wheels.
The BMW CE 04 has always stood out for its sci-fi styling and high-performance drivetrain. It’s built on a mid-mounted liquid-cooled motor that puts out 31 kW (42 hp) and 62 Nm of torque. That’s enough to rocket the scooter from 0 to 50 km/h (31 mph) in just 2.6 seconds – quite fast for anything with a step-through frame.
The top speed is electronically limited to 120 km/h (75 mph), making it perfectly capable for city riding and fast enough to hold its own on highway stretches. Range is rated at 130 km (81 miles) on the WMTC cycle, thanks to the 8.9 kWh battery pack tucked low in the frame.
But while the core performance hasn’t changed, BMW’s 2025 update focuses on refining the package and giving riders more options to tailor the scooter to their taste. The new CE 04 is available in three trims: Basic, Avantgarde, and Exclusive.
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The Basic trim keeps things clean and classic with a Lightwhite paint scheme and a clear windshield. It’s subtle, sleek, and very much in line with the CE 04’s clean-lined aesthetic. The Avantgarde model adds a splash of color with a Gravity Blue main body and bright São Paulo Yellow accents, along with a dark windshield and a laser-engraved rim. The top-shelf Exclusive trim is where things get fancy, with a premium Spacesilver metallic paint job, upgraded wind protection, heated grips, a luxury embroidered seat, and its own unique engraved rim treatment.
There are also a few new tech upgrades baked into the options list. Riders can now spec a 6.9 kW quick charger that reduces the 0–80% charge time to just 45 minutes (down from nearly 4 hours with the standard 2.3 kW onboard charger). Tire pressure monitoring, a center stand, and BMW’s “Headlight Pro” adaptive lighting system are also available as add-ons, along with an emergency eCall system and Dynamic Traction Control.
BMW has kept the core riding components in place: a steel-tube chassis, 15-inch wheels, Bosch ABS (with optional ABS Pro), and the impressive 10.25” TFT display with integrated navigation and smartphone connectivity. The under-seat storage still swallows a full-face helmet, and the long, low frame design means the scooter looks like something out of Blade Runner but rides like a luxury commuter.
With these updates, BMW seems to be further cementing the CE 04’s role at the high end of the electric scooter market. It’s not cheap, starting around €12,000 in Europe and around US $12,500 in the US, with prices going up from there depending on configuration. However, the maxi-scooter delivers real motorcycle-grade performance in a package that’s easier to live with for daily riders.
Electrek’s Take
I believe that the CE 04’s biggest strength has always been that it’s not trying to be a toy or a gimmick. It’s a real vehicle. Sure, it’s futuristic and funky looking, but it delivers on its promises. And in a market that’s still surprisingly sparse when it comes to premium electric scooters, BMW has had the lane mostly to itself. That may not last forever, though. LiveWire, Harley-Davidson’s electric spin-off brand, has teased plans for a maxi-scooter-style urban electric vehicle in the coming years, but as of now, it remains something of an undefined future plan.
Meanwhile, BMW is delivering not just a concept bike but a mature, well-equipped, and ready-to-ride electric scooter that keeps improving. For riders who want something faster and more capable than a Class 3 e-bike but aren’t ready to jump to a full-size electric motorcycle, the CE 04 hits a sweet spot. It delivers the performance and capability of a commuter e-motorcycle, yet with the approachability of a scooter. And with these new trims and upgrades, it’s doing it with even more style.
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If you’ve ever wondered what happens when you combine a fruit cart, a cargo bike, and a Piaggio Ape all in one vehicle, now you’ve got your answer. I submit, for your approval, this week’s feature for the Awesomely Weird Alibaba Electric Vehicle of the Week column – and it’s a beautiful doozie.
Feast your eyes on this salad slinging, coleslaw cruising, tuber taxiing produce chariot!
I think this electric vegetable trike might finally scratch the itch long felt by many of my readers. It seems every time I cover an electric trike, even the really cool ones, I always get commenters poo-poo-ing it for having two wheels in the rear instead of two wheels in the front. Well, here you go, folks!
Designed with two front wheels for maximum stability, this trike keeps your cucumbers in check through every corner. Because trust me, you don’t want to hit a pothole and suddenly be juggling peaches like you’re in Cirque du Soleil: Farmers Market Edition.
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To avoid the extra cost of designing a linked steering system for a pair of front wheels, the engineers who brought this salad shuttle to life simply side-stepped that complexity altogether by steering the entire fixed front end. I’ve got articulating electric tractors that steer like this, and so if it works for a several-ton work machine, it should work for a couple hundred pounds of cargo bike.
Featuring a giant cargo bed up front with four cascading fruit baskets set up for roadside sales, this cargo bike is something of a blank slate. Sure, you could monetize grandma’s vegetable garden, or you could fill it with your own ideas and concoctions. Our exceedingly talented graphics wizard sees it as the perfect coffee and pastry e-bike for my new startup, The Handlebarista, and I’m not one to argue. Basically, the sky is the limit with a blank slate bike like this!
Sure, the quality doesn’t quite match something like a fancy Tern cargo bike. The rim brakes aren’t exactly confidence-inspiring, but at least there are three of them. And if they should all give out, or just not quite slow you down enough to avoid that quickly approaching brick wall, then at least you’ve got a couple hundred pounds of tomatoes as a tasty crumple zone.
The electrical system does seem a bit underpowered. With a 36V battery and a 250W motor, I don’t know if one-third of a horsepower is enough to haul a full load to the local farmer’s market. But I guess if the weight is a bit much for the little motor, you could always do some snacking along the way. On the other hand, all the pictures seem to show a non-electric version. So if this cart is presumably mobile on pedal power alone, then that extra motor assist, however small, is going to feel like a very welcome guest.
The $950 price is presumably for the electric version, since that’s what’s in the title of the listing, though I wouldn’t get too excited just yet. I’ve bought a LOT of stuff on Alibaba, including many electric vehicles, and the too-good-to-be-true price is always exactly that. In my experience, you can multiply the Alibaba price by 3-4x to get the actual landed price for things like these. Even so, $3,000-$4,000 wouldn’t be a terrible price, considering a lot of electric trikes stateside already cost that much and don’t even come with a quad-set of vegetable baskets on board!
I should also put my normal caveat in here about not actually buying one of these. Please, please don’t try to buy one of these awesome cargo e-trikes. This is a silly, tongue-in-cheek weekend column where I scour the ever-entertaining underbelly of China’s massive e-commerce site Alibaba in search of fun, quirky, and just plain awesomely weird electric vehicles. While I’ve successfully bought several fun things on the platform, I’ve also gotten scammed more than once, so this is not for the timid or the tight-budgeted among us.
That isn’t to say that some of my more stubborn readers haven’t followed in my footsteps before, ignoring my advice and setting out on their own wild journey. But please don’t be the one who risks it all and gets nothing in return. Don’t say I didn’t warn you; this is the warning.
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The OPEC logo is displayed on a mobile phone screen in front of a computer screen displaying OPEC icons in Ankara, Turkey, on June 25, 2024.
Anadolu | Anadolu | Getty Images
Eight oil-producing nations of the OPEC+ alliance agreed on Saturday to increase their collective crude production by 548,000 barrels per day, as they continue to unwind a set of voluntary supply cuts.
This subset of the alliance — comprising heavyweight producers Russia and Saudi Arabia, alongside Algeria, Iraq, Kazakhstan, Kuwait, Oman and the United Arab Emirates — met digitally earlier in the day. They had been expected to increase their output by a smaller 411,000 barrels per day.
In a statement, the OPEC Secretariat attributed the countries’ decision to raise August daily output by 548,000 barrels to “a steady global economic outlook and current healthy market fundamentals, as reflected in the low oil inventories.”
The eight producers have been implementing two sets of voluntary production cuts outside of the broader OPEC+ coalition’s formal policy.
One, totaling 1.66 million barrels per day, stays in effect until the end of next year.
Under the second strategy, the countries reduced their production by an additional 2.2 million barrels per day until the end of the first quarter.
They initially set out to boost their production by 137,000 barrels per day every month until September 2026, but only sustained that pace in April. The group then tripled the hike to 411,000 barrels per day in each of May, June, and July — and is further accelerating the pace of their increases in August.
Oil prices were briefly boosted in recent weeks by the seasonal summer spike in demand and the 12-day war between Israel and Iran, which threatened both Tehran’s supplies and raised concerns over potential disruptions of supplies transported through the key Strait of Hormuz.
At the end of the Friday session, oil futures settled at $68.30 per barrel for the September-expiration Ice Brent contract and at $66.50 per barrel for front month-August Nymex U.S. West Texas Intermediate crude.