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The Biden administration is trying to jump-start electric vehicle sales. One way it is looking to do that is with federal subsidies. Of course, as he has said many times in the past, Tesla founder Elon Musk is vocal about not liking EV company subsidies. He also says that federal subsidies to oil and gas should also end. Is he right about one, or both?

He does, however, think that subsidies for EVs should increase. Obviously, since Tesla can’t seem to crack the affordable EV model, subsidies help make Tesla cars cheaper. Earlier this week, Bloomberg reported that Musk said, “I would say honestly I would just can this whole bill.”

Build Back Better has levels of subsidies to purchase an EV

President Biden EV subsidies
President Joe Biden and Colorado Governor Jared Polis promoting Build Back Better | Getty

He’s referring to the Build Back Better bill now before the Senate. It has a large provision for EV subsidies. “Don’t pass it,” says Musk. “That’s my recommendation.” 

But the Biden administration shot back in the form of Transportation Secretary Pete Buttigieg. At a Wall Street Journal confab, he said, “We think it’s very important to fund EV charging stations and to also make sure what’s in the next Build Back Better Act to buy down the price of electric vehicles.” 

“Do we need support for gas stations? We don’t,” said Musk. “There’s no need for support for a charging network. I would just delete it. Delete. I’m literally saying get rid of all subsidies. Also for oil and gas.”

President Biden’s climate goals mean speeding up EV sales through subsidies

Biden and GM
Joe Biden and General Motors CEO Mary Barra | Getty

Buttigieg says that the Biden administration is committed to electric cars and the transition to them. The President has climate goals that need to happen sooner than has been planned. He also wants the shift to benefit US workers. As in US union workers.  “Of course we believe in the benefits of union jobs,” said Buttigieg. “These are things that don’t happen on their own.”

The Biden proposal allows for a $7,500 credit for Tesla vehicles. But it also gives buyers an additional $4,500 if the EV is assembled by union workers. The United Auto Workers have spent years trying to organize Tesla’s Fremont, California, assembly plant into a union shop. Musk has always been opposed to such a move. 

Some bad and some good are smashing together

EV subsidies
President Joe Biden arrives at the General Motors Factory ZERO electric vehicle assembly plant | Getty

So the past, Musk’s dislike of unions, and the credits that go with it have all smashed together under Biden’s current proposal. It’s a convergence of capitalism, the environment, and politics, all rolled up in a crap sandwich. Does it benefit Americans, the Biden administration, or Musk’s bottom line? 

Tesla is in such a strong position that it seems nothing can harm it. Not even having buyers miss out on the additional $4,500 credit. These are not entry-level vehicles. If a consumer has decided that he or she wants a Tesla, then the loss of that extra union credit probably won’t matter. 

Still, Musk likes his Twitter bully pulpit, and this is as good as any drama to exploit. What we wish for is whatever benefits the American people. At this point, it is hard to tell what that might be. 


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