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A big problem for Tesla isn't getting much attention
- noir_lord 1y agoOh no. How unfortunate.
- cwoolfe 1y agoGovernments also subsidize gasoline.
- mysterydip 1y agoWhy do they tax it? Wouldn't it make more sense to lower the amount of subsidy?
- toomuchtodo 1y agoRoad 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_States https://en.wikipedia.org/wiki/Fuel_taxes_in_the_United_State... https://en.wikipedia.org/wiki/Highway_Trust_Fund 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-american-weigh-station/ https://hackaday.com/2025/06/26/field-guide-to-the-north-ame...
- mort96 1y agoSo, 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.
- Fwirt 1y agoSomebody 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.
- tzs 1y agoI 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.
- ksherlock 1y agoSometimes a subsidy is a big pile of cash. Sometimes a subsidy is an accelerated depreciation schedule.
- meragrin_ 1y agoHow so? Please give very specific answers which don't include the normal business practices afforded to every other business or incalculable garbage.
- cwoolfe 1y agohttps://gemini.google.com/share/50aa1139866b https://gemini.google.com/share/50aa1139866b
- lenerdenator 1y agoI 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.
- SoftTalker 1y agoThere is a rapidly growing market for battery storage outside of EVs. They will likely be fine.
- lenerdenator 1y agoThere is, but is it at the price point an American factory in a medium COL city can produce?
- mook 1y agoIt'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?
- kacesensitive 1y agoThis 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.
- SoftTalker 1y agoWhere "shortcomings of legacy automakers" means "selling cars that people want to buy"
- jasonthorsness 1y agoThere'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.
- avgDev 1y ago"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.
- 0cf8612b2e1e 1y agoFor 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.
- hnburnsy 1y ago>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
- paxys 1y agoI 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?
- onlyrealcuzzo 1y agoRivian 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.
- bryanlarsen 1y agoHonda 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?
- onlyrealcuzzo 1y ago> 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.
- 4d4m 1y agoThe prologue is a massive turd masquerading behind a storied name quickly losing its luster, change my mind
- neogodless 1y agoI, for one, cannot wait for GM to introduce their first EV! https://news.gm.com/home.detail.html/Pages/topic/us/en/2024/nov/1104-evsales.html https://news.gm.com/home.detail.html/Pages/topic/us/en/2024/... https://insideevs.com/news/764409/general-motors-ev-sales-q2/ 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.
- AlwaysRock 1y agoI 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.
- buerkle 1y agoI 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.
- tedivm 1y agoIn 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.
- avgDev 1y agoI considered electric too, and would never buy a Tesla with Elon at the helm.
- SoftTalker 1y agoYes, 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.
- viraptor 1y ago
- gok 1y agoIt's emissions credits, saved you a click.
- deleted 1y ago[deleted]
- SoftTalker 1y agoVersion without popups and other visual jank: https://lite.cnn.com/2025/07/22/business/tesla-regulatory-credit-sales-revenue https://lite.cnn.com/2025/07/22/business/tesla-regulatory-cr... I always check CNN links to see if s/www/lite/ works.
- roxolotl 1y agoI 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.
- 7e 1y agoBecause 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.
- enslavedrobot 1y agoThere 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.
- illiac786 1y ago
- Animats 1y agoClickbait 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.
- AnimalMuppet 1y agoFrom 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.
- nunez 1y agoThat 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.
- Sohcahtoa82 1y ago> 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.
- Muromec 1y ago>All because what, he wants to be an edgelord? All because his son turned out to become a daughter .
- tzs 1y agoUS 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.
- mrcwinn 1y agoAnyone know if Tesla’s environmental impact reports consider how the credits system influences the fuel economy of competing fleets?