I think other commenters are misunderstanding what credits are being discussed here. There are credits which are provided to reduce the cost of vehicles which most everyone knows about. The removal of those credits will reduce the likelihood of purchasing a car because it makes cars more expensive.
That is not what’s being discussed here. These credits are credits which allow automakers to make their fleet’s average gas mileage seem higher. Electric automakers can sell credits to gas car manufacturers which allows them to avoid penalties for not having a more fuel efficient fleet. Those penalties have been removed which means there’s no longer a reason to purchase these credits.
This is a pretty big deal for TSLA because selling these credits to other automakers is an important and consistent portion of their revenue.
Because Tesla sells these credits, they completely negate any environmental benefit from buying one, and always have. Any Tesla you buy just allows another automaker to sell a huge gas guzzler that they otherwise would not have been able to. As a bonus, selling them discourages other automakers to make EVs. Tesla can stall the EV programs of competitors by selling them these credits. They are contrary to Tesla’s mission statement, and if Tesla cared about the environment, they would keep the credits and not sell them: forcing the world to move to EVs faster.
The fact that these credits are going away is a really bad thing, but let’s not pretend there is any environmental benefit to buying a Tesla. Once the credits are gone there will be, but not now.
It’s called the waterbed effect and is an oversimplification actually. The pollution is not simply modeled with theses credits, there’s more to it.
The waterbed effect is something often cited, even by environmentalists, especially economists that think they have modelled pollution and feel obligated to publish a book about it, I noticed.
To be clear, I am not saying you are either of these things, just putting some context around the concept. I fell hard for the waterbed effect but I came back from it =)
There is a huge environmental benefit to buying a Tesla not only in the mitigated emissions but in the transfer of emission credit money from polluters to clean energy focused Tesla. Tesla's scale and innovation has dramatically changed the costs of batteries unlocking massive solar adoption and paving the way for a renewable distributed energy future.
The idea that buying a Tesla doesn't do anything for the environment is just something people who buy gas cars tell themselves as they destroy our climate.
That anti-EV provisions in this bill will simultaneously hurt Tesla, possibly for good, disincentivize legacy automakers from ramping up their EV programs AND sully consumer interest in buying EVs for a good long while, especially when combined with state-level registration tax hikes for EVs. (It costs $225 to renew an EV registration in Texas. It used to be $85.)
All this combined with the protectionist tariffs in place will secure big auto's desires to continue pumping out inefficient and environment destroying gas vehicles (which I posit was what they wanted to do all along) while ensuring that cheap Chinese EVs never see the light of day, customers be damned.
None of this wouldn't have happened if Elon didn't meddle with politics.
This has to be one of the biggest own-goals in American business.
> None of this wouldn't have happened if Elon didn't meddle with politics.
> This has to be one of the biggest own-goals in American business.
All he had to do was keep pushing the environmental progress story, maybe stop overpromising FSD, and he'd still be selling tons of cars.
It's just wild to me that he would cozy up with a political party that were never going to buy his product, and in fact goes out of their way to reduce demand for his product.
All because what, he wants to be an edgelord?
It really just shows how much of a lunatic he is.
>All because what, he wants to be an edgelord?
All because his son turned out to become a daughter .
US auto makers are going to have to continue working on their EV programs because depending on the car maker something like 40 to 60% of their sales are foreign.
Those markets will continue to become more and more electric and if the US makers want to stay competitive in those markets, they have have to go electric too.
Version without popups and other visual jank:
https://lite.cnn.com/2025/07/22/business/tesla-regulatory-cr...
I always check CNN links to see if s/www/lite/ works.
Governments also subsidize gasoline.
How so? Please give very specific answers which don't include the normal business practices afforded to every other business or incalculable garbage.
Why do they tax it? Wouldn't it make more sense to lower the amount of subsidy?
Road maintenance. It's already not taxed enough to pay for existing roads. Auto fuel/mileage taxes will need to go up to continue to pay for roads in the future.
https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_State...
https://en.wikipedia.org/wiki/Highway_Trust_Fund
(road damage is roughly proportional to the fourth power (not square root) of axle weight (and linear with axle count), so it's heavy trucks doing most of the damage to road surfaces through a compression wave that penetrates into the asphalt surface, as axles travel over)
https://hackaday.com/2025/06/26/field-guide-to-the-north-ame...
So, I'm in favor of a gasoline tax.
But I don't get why you'd want to both subsidize and tax. The government gets money from the tax, sure, but if they get $X from taxes and spend $Y on subsidies, couldn't they just remove the subsidies, change the tax to $X-$Y, and use the money that used to go to subsidies to fund road maintenance? If that still isn't enough, then you can increase the taxes.
To be honest, I suspect I know why it is like this. The subsidies go to oil companies, while the tax comes from citicens. So the combined effect of oil subsidies and fuel taxes is to transfer wealth from citizens to oil companies.
Somebody please correct me, but I believe the subsidies and taxation happen at different levels of government. The subsidy is federal, while the taxes are primarily state and local. The taxes help fund maintenance of local roads. Your federal income tax pays for the subsidies but the gas tax pays for your local roads.
I believe that the subsidies are for oil production and refining in general. When the subsidy happens you don’t know how much of what you are subsidizing will end up becoming gasoline.
There are also imports to be considered. If you take the money for roads out from the production subsidies then domestic producers will be effectively paying more toward roads than foreign producers that export to the US.
Taxing gasoline to support roads does a much better job of approximating a per mile road user fee which is what would probably be the best way to do it if the overhead could be kept low.
Sometimes a subsidy is a big pile of cash. Sometimes a subsidy is an accelerated depreciation schedule.
I wonder what the wider impact of this will be on American EV production.
A lot of things in that space (and, well, literally the rest of American society) depended upon assumptions about the regulatory and incentive structure that the legislative implementation of Project 2025 is tearing apart.
EDIT:
An example of this would be a local battery plant near me that just opened. It's currently the largest in the US. It was built with the understanding that certain subsidies would exist and that people would be buying electric vehicles. Does that factory get built without the incentives that the BBB is scrapping? Probably not.
It's probably an issue for lots of things outside EV production too. What happens to corn that's already been planted if the subsidies suddenly stop a month before harvest?
There is a rapidly growing market for battery storage outside of EVs. They will likely be fine.
There is, but is it at the price point an American factory in a medium COL city can produce?
Clickbait title. Not HN's fault. It reflects a problem at news sources.
It may be necessary to reconsider the HN rule that the title from the original article should be used.
From the guidelines: "please use the original title, unless it is misleading or linkbait". Not stated, but implied: If it is clickbait, change it to something that actually reflects what the article is about.
I feel like this is going to be a much bigger blow for smaller EV makers than Tesla. Tesla's books might take a hit, sure, but will Rivian, Lucid etc. be able to survive?
Rivian and Lucid aren't the real competitors.
It's Hyundai/Kia, BYD if they're ever allowed to build in the US, and if Toyota or Honda or GM ever get serious about EVs.
Honda sells a lot of Prologue EV's, and Toyota sells a lot of bZ EV's. The two companies seem to have split brain about EV's. The exec's bash them, but then they add incentives to their EV's to ensure they sell well. If they don't like EV's, why do they add so many incentives to make them move well?
> If they don't like EV's, why do they add so many incentives to make them move well?
Because they produced them and need to sell them, and they aren't moving without the incentives - the same reason any auto-manufacturer adds incentives.
What about Volkswagen?
Doesn’t BYD have a bus factory in LA already?
I, for one, cannot wait for GM to introduce their first EV!
https://news.gm.com/home.detail.html/Pages/topic/us/en/2024/...
https://insideevs.com/news/764409/general-motors-ev-sales-q2...
They are still behind but approaching 50K per quarter isn't something to sneeze at.
With the general incentives still available for EVs, plus some good deals Chevy is now running, and the already pretty low starting price for the Chevy Equinox EV I'm not surprised they are doing well. The base model FWD model, with an EPA rated range of 319 miles, is listed as $32k on Chevy's site, but after destination fees and such seems to be $35k at dealers so I'm going to use that.
Here are some of the incentives available to lower that:
• $7500 federal tax credit.
• $1250 if you own or lease a 2011 or later non-GM car.
• $1250 if you have a Costco Executive membership.
• $500 for being in at least one of these categories: Military, Healthcare professional, First responder, College student or recent graduate, and Educator.
Some of those categories include a lot of people.
The military one includes reservists, veterans, and retirees.
The healthcare one includes not just doctors and nurses, but also dentists, pharmacists, counselors, therapists, athletic trainers, medical and dental assistants, hospital employees, social workers, dietitians, and more.
The college one includes current college and graduate students or those two graduated from a two or four year college within the past two years.
The educator one just says you must be employed by a public school, private school, college, or university. It doesn't say it has to be a teaching job.
If you get all 4 of these discounts (tax credit, 2011+ non-GM car, Costco, and the $500) that would bring a base Equinox down to $24.5.
There are also some states that have that have EV rebates. Some of these are substantial. For example Illinois has a $4000 rebate.
Oregon has $2500 but also an additional $5000 for low income families. Low income means under 400% of the federal poverty level. That's $63k for a single person, $79k for two people, $107k for three, and $129k for four. The median household income in Oregon is $80k so I'd guess there are a lot of households that qualify for the $7500 EV rebate.
With just that an the federal tax credit that would make the base Equinox $20k in Oregon.
Even if you only get the federal tax credit that gets it do $27.5k. That's lower than most comparable ICE cars.
The base model is pretty good and that's what a lot of people buy, but it is kind of basic. Its cruise control for example is just basic cruise control: if below the set speed accelerate, if above the set speed let up on the gas but it will not brake.
Personally I consider adaptive cruise control a requirement. The cheapest Equinox with that is the base FWD model with the "active safety 2" ($545) and "comfort" ($1455) packages added (the first is the one with active cruise control but those two packages can only be bought together) which adds exactly $2000.
Perhaps they'll be bought up.
Heck, perhaps Tesla will be.
Who's going to pony up a trillion dollars?
How long do you think Tesla is going to be worth their funny money market cap?
i think they'll only be worth a trillion for another 6 months or so and then it will start going up
I think there was a time when Apple would've made a lot of sense. They have the money, and they have ambitions in the automotive area. Apple buing Tesla feels about as appropriate as Apple buying Beats by Dr. Dre, IMO.
.. However, I think Elon has made the Tesla brand so toxic to demographics which are important to Apple, so I don't think an acquisition makes sense anymore.
Apple buying Tesla seems as weird as Sony buying Mazda though. Apple is just not a car company — they're a consumer electronic company (that are, if anything, moving hard into services).
At some point, it will not be worth that much.
you guys are delusional
A cursory glance at Rivian's 10-K suggests it is a non-trivial amount of money, but probably survivable if their business keeps growing. Also. Rivian's stock price isn't based on as much magical thinking as Tesla's.
Anyone know if Tesla’s environmental impact reports consider how the credits system influences the fuel economy of competing fleets?
I believe this has been talked about a lot. Musk wasnt thrilled about this change but Tesla is, like it or not, the most recognizable electric car company in America. If you are dead set on going electric you are likely going to at least look at what Tesla has to offer. Because of that, the tax credit going away will impact them far less than other companies that people have to go out of their way to learn about and search for.
Now does a lot of that change because people might not buy teslas because they dont like Elon? Maybe? Who knows.
I bought an electric early last year and never considered Tesla because of Elon. I'm sure I'm not the only one.I disagree with "have to go out of their way", many companies now build electrics and it's easy to find them.
In 2024 Tesla sales accounted for 49% of EV sales in the US. Tesla sales have been dropping quarter to quarter (ie, Q1 2025 was less than Q1 2024) as well as year over year. I see no reason why that trend would change in Tesla's favor.
I considered electric too, and would never buy a Tesla with Elon at the helm.
I'm thinking the opposite. Companies like Ford, Hyundai, Honda, Chevy (GM) have non-electric sales and so are less perturbed by the tax credit loss.
Not only are they not really hurt that much by the loss of the tax credit, they’ve already pulled back from their EV ambitions in many ways. That’ll be even easier for them now if they don’t have to spend money on offsets as well.
It is a bad time to be an EV-only manufacturer with mass-market ambitions right now.
Consumers on average are more interested in buying hybrids from the big boys instead of pure EVs and the promised mass market cheap EV game changer is now even more removed from reality with the loss of the tax credits.
Yes, I think a lot of people who viscerally don't like Trump, also by association viscerally don't like Elon, and would never consider buying a Tesla.
If any of these folks bought a Tesla before 2024 they might now be somewhat conflicted about what to do about it.
But the fact remains that as far as EVs go, Tesla has the best charger network and the best cars with the longest track record, so other than the Elon/Trump stuff they probably are the best choice.
> Tesla has the best charger network
Indisputably true, for sure.
But they drained that moat by allowing other cars to use NACS and join the Supercharger network.
> and the best cars
That's really debatable. It's more of a meme. If you actually check a few different brands, Tesla is not that great. I know I've got preferences against it for purely technical reasons as well.
> with the longest track record
It's long enough that you can read all about various long term issues like servicing all over the internet now.
This is the kind of structural revenue loss that doesn’t show up until it’s too late. Tesla’s been skating on regulatory credits for years, essentially subsidized by the shortcomings of legacy automakers. Now that the training wheels are off, we’re about to see what the core business can actually do.
I do wonder just how much Elon himself affects sales in the next few years. I for one have a moral obligation to make my next vehicle an EV, but I have an even greater obligation not to fund Musk.
There's a great historical chart in the article: while the credits are a visible percentage of their revenue, I don't think you can go as far as "skating on regulatory credits for years". Although their absence will erase a lot of profit.
For Tesla, regulatory credit sales alone have brought in $10.6 billion since 2019. There are some quarters, like earlier this year, where credit sales exceeded the company’s total net income — meaning the company would have lost money without them.
>Sounds like a pretty big problem to me
2024
Revenue $97.69B
Regulatory Credit Revenue $2.76B
Net Income $8.40B
Cash and Short-Term Investments $36.6B
"Visible"? The carbon credit of $2.7 billion represented nearly 40% of their net income in 2024.
90% of the vehicles they sell also got the $7500 credit.
They are in dire times.
Where "shortcomings of legacy automakers" means "selling cars that people want to buy"
I mean, Tesla sells these credits to legacy automakers, in part, to deliberately stall the EV programs of competitors. So they are complicit in the “shortcomings” of these automakers.
It's emissions credits, saved you a click.
Oh no.
How unfortunate.