American billionaire Elon Musk invested more than $250 million in the election campaign of US President Donald Trump, and in return received something that will make Tesla lose billions. This was reported on July 4 by the Financial Times (FT).
It is noted that Trump’s “large and brilliant bill” threatens Tesla’s most important source of profit – the sale of emission quotas.
The American leader’s tax bill is aimed at repealing federal standards for “corporate average fuel economy” (Cafe). The program was created to punish automakers whose cars do not meet fuel efficiency requirements and reward those whose cars do not produce harmful emissions by giving them “clean air credits” that can then be sold to competitors running on gas to offset the fines, the article explains.
“If there is no punishment for fraud, then there is no point in buying certificates of compliance <…>. “I’m not sure how costly these [changes] will be compared to the damage Musk has done to Tesla by becoming a Trump crony and a pariah,” said Dan Becker, director of Safe Climate Transportation at the Center for Biological Diversity.
According to the FT, Tesla will lose, among other things, a significant portion of federal support and tax breaks for battery manufacturing, operating a network of electric vehicle charging stations, producing solar roof tiles, and commercial and residential battery packs because of Trump’s bill.
“This is terrible policy and a devastating blow to Tesla’s profits. It’s not just about Cafe, it’s about tariffs, the consumer credit, the manufacturer tax credit, the charging credit, and the residential solar credit. Elon has finally woken up, but he’s a day late and a dollar short,” said former Tesla CEO Karim Busta.
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