It is commonly known that the recent Inflation Reduction Act bill” will provide $7500 tax credits for buyer of EVs in the United States. This will enable EV makers who mostly make their EVs in the US to get billions in increased profits if they were to make and sell a lot of EVs. Tesla making and selling 500,000 EVs would see about $3.3 billion per year in benefits split between the company and its customers.
There is also $35-45 per kWh for makers of batteries made in the US.
Tesla has half of the nearly 40 GWH/year battery factory in Nevada and all of the soon to produce 10 GWH/year factory on Kato Road in Fremont California and the Austin Texas battery factory which should make 10 GWH by the end of the year and 50-100 GWH in 2023.
The batteries produced should provide another $1-2 billion in tax benefit to Tesla in 2023 and $3-5 billion in benefit in 2024.
If Tesla masters scaling 4680 battery production in Kato road and Texas then any new battery factory making over 110 GWH would be completely paid for by the US government.
This would be the same for other EV battery makers that have or build battery factories in the US.
9/12
EDIT: $35 off per kWh, that would equate to over $5B in valued subsidies, per year! Keep in mind, this does not even include the benefits Tesla will receive from the $7,500 vehicle credit (e.g. being able to keep prices higher due to increased consumer demand)…— Dedafima (@dedafima) August 27, 2022
Yup, even the $1.3B $TSLA will likely get in 2023 would make a big dent in the price of a new gigafactory. Assuming each new gigafactory costs $5B, $TSLA would need closer to ~110GWh of U.S. production for gigas to essentially start paying for themselves. Should happen by 2024/25 https://t.co/211UNNeSaN
— Dedafima (@dedafima) August 28, 2022
Brian Wang is a Futurist Thought Leader and a popular Science blogger with 1 million readers per month. His blog Nextbigfuture.com is ranked #1 Science News Blog. It covers many disruptive technology and trends including Space, Robotics, Artificial Intelligence, Medicine, Anti-aging Biotechnology, and Nanotechnology.
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Not pleased with government distorting markets. Everything should work economically of its own accord. Look how manufacturers immediately raised prices even though the ink on the bill was not even dry.
I agree that EVs are coming and long term may be the best bet, especially once the battery thing is sorted out (of neodymium and other rare earth minerals), but it won’t be workable unless nuclear fission is re-established as a “green” source or if fusion finally comes to fruition.
The US government has been distorting the markets since forever, do you propose this should be the one exemption? Should all the support for the oil industry be exempt?
As batteries become cheaper to produce, the $35 per kW will look generous, and be put on the chopping block. Conceivably, with some cheaper chemistry, like aluminum/sulfur/liquid salt, the batteries could soon cost less than $35 per kw to make.
Great news on battery subsidies but congress really should have baselined prices to April 2022 and gamed subsidies to, you know, reduce inflation. IE: April 2022 MSRP prices are locked – for every $1 in price increase, reduce the Inflation Reduction Act tax subsidy $5. Same with battery price per kWh.
It looks good that this tax credit encourages U.S. production, but these types of tax credit only benefit the car dealership which is gaming the system to make their sale, and maximize their profit at the expense of the car buyer and taxpayer.
Such poor reporting!!!
If Tesla ALREADY sells every car they make as fast as they can make them, then how does this bill put ADDITIONAL dollars in Tesla’s pockets???
The simple answer is that it does NOT
It does however put an additional few thousand bucks in the pockets of the purchasers
Tesla can raise prices. The battery tax subsidy goes to Tesla for making batteries in the US