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A lot is going on in the automotive industry, especially when it comes to electric vehicles. However, there seems to be a rift between the EV community and Tesla CEO Elon Musk. The new bill proposes extra cash for EVs produced in union factories and snuck in a considerable benefit for vehicles like the Ford Mustang Mach-E. What’s the deal with the newest version of the bill?

Tesla, Elon Musk, and EV incentive package

Tesla: Elon Musk Isn't Happy With the New Proposal for Union Automakers
Tesla: Elon Musk Isn’t Happy With the New Proposal for Union Automakers | Toby Scott/SOPA Images/LightRocket via Getty Images

Over the weekend, Musk took to Twitter to give his opinion about a new EV incentive. According to a report by Electrek, the new incentive shafted Tesla. The updated proposal would remove the limit of vehicle sales (right now, it is capped at 200,000) and would offer a higher incentive amount. Instead of it being a federal tax rebate, it would be more of an instant point-of-sale rebate.

The proposal would offer a rebate of $12,500, but the restrictions would only offer Tesla buyers a $4,500 rebate. While the program needs reforming, Musk is not pleased with the deal. Currently, no Tesla EVs are eligible for the federal tax credit.

The $4,500 number from the bill comes from purchasing an EV from a union factory. That gives a distinct advantage to union factories like GM, Chrysler, Ford, Jeep, and Mitsubishi. Large companies like Tesla, Toyota, Nissan, Honda would be deemed ineligible.

Elon Musk thinks Tesla has been explicitly ignored

After The government proposed the newest version of the bill, Musk aimed at Ford and the United Auto Workers union. Musk Tweeted that he felt the bill was written by those who would benefit from the changes. The bill gives unionized American automakers an advantage.

Tesla has resisted unionizing at the Fremont, California, factory. But if this is the version of the bill that passes, Ford, GM, and Chrysler would be at a considerable advantage. But the most glaring piece of the bill would undoubtedly benefit Ford.

One piece of the newest proposal would give a five-year grace period for those electric vehicles made outside of the U.S. to get the $7,500. That would grandfather in Ford and the Mustang Mach-E to get the total incentive, built in Mexico. There doesn’t seem to be any way around that fact, as the language is meant to benefit Ford. The Mach-E is currently one of the best selling vehicles in Ford’s lineup, so it makes sense to want to keep that momentum going.

The incentive bill still has a long way to go

Without getting into the politics of the situation, a $12,500 incentive will get a lot of drivers into new EVs. Tesla has been a large part of the electric vehicle revolution, even if the factories are not unionized. However, the brand could always unionize?

It would be nice if all vehicles were eligible for the total rebate, but that’s not always how the cookie crumbles. Getting any bill passed and through the red tape is a lot of work, but it isn’t currently benefiting as many people as possible.

Tesla has been successfully building and selling electric vehicles for many years now, and the brand’s participation in this move has been crucial. While other automakers are simply ramping up production on EVs in the next few years, Tesla has been doing it for years already.


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