Instead of handing out 200 million per month in direct tax credits that lower the price of electric vehicles, governments could redirect those funds to purchasing raw materials for batteries, as Tesla will do with the first refinery American lithium refinery American lithium refinery.
Tesla just passed the first sustainably sourced raw material through the furnace at its Gulf Coast refinery, and is on track to have it operational in 2025, as promised. Coincidentally, the Trump transportation transition team that is preparing autonomous vehicle legislation in support of Tesla’s car, the Tesla Robotaxi, may at the same time redirect the $7,500 tax credit on the Model Y to projects such as Tesla’s refinery.
In a leaked document, the team called battery materials, like lithium and rare earth minerals,of “criticism for defense production“, unlike retail electric vehicles or charging stations. President Biden’s Inflation Reduction Act provides $7.5 billion for building charging infrastructure, along with the direct tax credit of $7,500 mentioned above, of which Tesla’s Model Y is the biggest beneficiary, and this funding could now be phased out once the new White House administration is in place.
This would directly impact the purchase price of future owners of Tesla’s next car, the Tesla Model Y Juniper, who may never benefit from the reduced tax credit enjoyed by owners of the version current.
Mr. Trump’s transition team argues that securing the supply chain for batteries and raw materials should be the main focus of government funding, rather than subsidies for electric vehicles, and cites studies from the Department of defense according to which this security is essential for national security. The Inflation Reduction Act already includes a component relating to local battery production, since only vehicles equipped with batteries manufactured in the United States are eligible.
Additionally, the Trump administration is preparing to roll back emissions and fuel economy standards for gasoline cars to 2019 levels, and ban government mandates for electric vehicles, which could make things even more difficult car manufacturers like Tesla.“When he takes office, President Trump will support the auto industry, making room for both gasoline-powered cars and electric vehicles“, commented the spokesperson for the transition team.
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