The new electric vehicle tax credit proposals, which are part of the “Inflation Reduction Act of 2022,” though broadly supporting the industry, left some Tesla, Inc. TSLA supporters disappointed.
Tesla Supporters Cry Foul: Tesla influencer and YouTuber Rob Maurer on Friday shared on Twitter an open letter to the members of Congress to reconsider the provision that is “overly rewarding” production of plug-in hybrid EVs (PHEVs).
The proposal recommends PHEVs, with a battery capacity of as little as 7-kilowatt-hour, receive the maximum credit of $7,500, he noted. This compared to the maximum credit of $3,334 allowed for this category of vehicles under the current legislation, I added.
His contention was that real-world testing has proven that PHEVs role in emission control has been “dramatically overestimated” and it is difficult to justify such a large credit for low-capacity PHEVs.
Maurer cited Bloomberg New Energy Finance estimates that showed that EV batteries cost $132 per kWh, and by extension, a 7-kWh battery could cost just $924. As opposed to this, a lower emission fully-electric vehicle battery requires 50 to over 100 kWh battery capacity, costing around $6,600 to $13,200, I added.
He recommended revising the proposal to either increase the 7-kWh requirement to align with the commensurate battery costs or reduce the maximum credit allowed for low-battery-capacity vehicles.
Musk Responds: Quote-tweeting Maurer’s tweet that carried the text of the letter as an image, Tesla CEO Elon Musk said, it could be time to move away from PHEVs. “Good point. Time to move on from hybrid cars. That was a phase,” he said.
Good point. Time to move on from hybrid cars. That was a phase.
— Elon Musk (@elonmusk) July 30, 2022
Tesla shares closed Friday’s session 5.78% higher at $891.45, according to Benzinga Pro data.
Photo: Created with an image from Steve Jurvetson on Flickr