Trump Suggests Ending EV Tax Credits, Appointing Elon Musk to Cabinet Role
![Matt Posky](https://cdn-fastly.thetruthaboutcars.com/media/profile/2022/08/25/1357641_2.jpg?size=91x91)
On Monday, Donald Trump reportedly suggested ending federal tax incentives for U.S. citizens purchasing all-electric vehicles if he wins the 2024 presidential election. He likewise said he would consider offering Tesla CEO Elon Musk, quite possibly the only automotive executive to publicly support ending EV credits, to a cabinet position or advisory role in his administration.
While the decision may seem odd on its face, it actually makes a fair bit of business sense if you've been following the plot for a few years.
"Tax credits and tax incentives are not generally a very good thing," Trump told Reuters during a recent campaign event in Pennsylvania.
This is familiar ground for Trump. In the latter years of his presidency, he suggested ending the $7,500 tax credit originally implemented to spur EV adoption rates during the Obama years. His argument was that automakers would simply use this as an excuse to keep prices high and that the scheme unfairly burdened taxpayers that didn’t purchase an all-electric vehicle.
However, the old system was based around vehicle sales caps to keep the available subsidies even between brands. Once individual automakers had reached 200,000 deliveries, they were no longer eligible. While the former president expressed mild distaste for the plan, the assumption was that it would eventually run its course. The White House was also overwhelmingly preoccupied with combating EV mandates being advanced on the West Coast and attempting to soften nationwide fuel economy standards.
California and roughly a dozen other supportive states had vowed to establish a timeline to ban the sale of combustion vehicles within their borders. Trump believed that the move would fracture the automotive industry and ultimately result in expensive vehicles many Americans would not want to purchase. This was part of a broader deregulation campaign he suggested would solidify domestic automotive jobs and provide the United States with more diverse vehicle lineups boasting lower MSRPs. However, the issue degraded into lawfare and numerous lawsuits were launched out of California — grinding any potential progress on the matter to a halt.
The Biden-Harris administration would adopt much of the vehicle policies promoted by the West Coast in 2021. It also revamped the federal EV tax credit scheme by decoupling it from sales quotas, effectively making them permanent. Automakers were, however, required to meet certain domestic content requirements to be eligible for the full $7,500 refund after concerns that the original program would financially advantage foreign entities.
Elon Musk was vocally opposed to the plan, initially confusing just about everyone. Why would the United States’ largest purveyor of all-electric vehicles go against free government money?
By the time Biden entered the Oval Office, Tesla had already surpassed the 200,000 vehicle quota stipulated under the original program and was arguably in a good position to continue taking advantage of the credits. However, the company was also the de facto leader in that particular vehicle segment and arguably had less to gain by seeing it progress indefinitely. Musk framed the updated EV tax credit scheme as unfair, suggesting that it was time for all-electric vehicles to stand on their own without government subsidies.
He may have believed that, too. But the fact of the matter is that continuing to offer money to Tesla rivals, that were just beginning to get their acts together in terms of EV production, likely didn’t benefit the Tesla brand as much as forcing everyone to go without or simply retaining the old system. For reference, the United States spent over $1 billion on EV subsidies in just the last year.
Musk likewise found himself at odds with the Biden-Harris administration pumping money into the EV charging infrastructure. The CEO’s company had very clearly cornered the charging market. Surveys routinely show that electric-vehicle owners prefer Tesla’s supercharging network above the competition, which are often chided by drivers for being unreliable. Pumping government money into building up that infrastructure meant more competition for Tesla.
The rest is down to politics. During 2020, Elon Musk bemoaned California and the City of Fremont’s leadership for trying to force him into suspending production during the pandemic. This appeared to be the final straw for the CEO, which began moving Tesla out of the state and into Texas. Whether it be down to personal principle or just business, Musk took a public stance against California and later the Biden administration.
Whatever rifts this formed was then exacerbated when Musk purchased Twitter (later rebranded as X) in 2022 and released countless files showcasing that the federal agencies had been directing the social media company to censor or promote certain voices based on politics for years. Elon has since claimed the website would serve as a “free-speech platform.” But that’s starting to take out beyond the confines of the automotive realm.
From Reuters:
Asked if he would consider naming Musk to an advisory role or cabinet job, Trump said he would. "He's a very smart guy. I certainly would, if he would do it, I certainly would. He's a brilliant guy," Trump said.
Musk last month publicly endorsed Trump in the U.S. presidential race. Tesla did not immediately respond to a request for comment.
If elected, Trump could take steps to reverse Treasury Department rules that have made it easier for automakers to take advantage of the $7,500 credit or could ask the U.S. Congress to repeal it entirely. While president, Trump sought to repeal the EV tax credit which was later expanded by President Joe Biden in 2022.
"I'm not making any final decisions on it," Trump said of the EV tax credit. "I'm a big fan of electric cars, but I'm a fan of gasoline-propelled cars, and also hybrids and whatever else happens to come along."
He added that he would rescind the Biden administration rules that will prod automakers to build more EVs and plug-in hybrids to meet stricter emissions standards and said he sees a "much smaller market" for EVs because of cost and battery range issues.
During Musk’s recent interview with Trump on X, he proposed creating an efficiency commission designed to oversee government spending in an effort to reduce waste. This may even have been the moment the former president considered the CEO as a possible candidate for a cabinet or advisor role.
Following Trump’s confirmation that he would be open to bringing Elon aboard his administration, the executive posted that he was “willing to serve” on social media. However, the statement was accompanied by a reference to his favorite meme coin and likewise used a Grok AI image of himself. While he’s presumably being serious, especially considering their earlier conversation, some have suggested that the post could have been a joke. We’re not in a position to ask him to clarify.
Considering the mounting pressure coming from the Biden-Harris administration, it may be a good idea for Musk to get involved now that he’s lost favored status with both the White House and legacy media. Let’s also not pretend like the agencies tied to the executive branch of the government aren’t already overloaded with former CEOs of the same companies they now regulate. Frankly, the only item that could undermine the situation is the fact Elon has been under the microscope of the Securities and Exchange Commission since 2018 over public statements made about Tesla. However, arguments could likewise be made that automakers misrepresent their business plans and products all the time.
That’s certainly not an endorsement of that kind of behavior, just an acknowledgement that it’s the status quo. Meanwhile, the man is already tied to the government by way of Starlink and Space X — the latter of which has gained a lot of traction following the highly publicized failures of Boeing’s work with NASA.
As for Tesla and all-electric vehicles, the assumption is that Trump would eliminate subsidies on the grounds that it unburdened taxpayers and deregulated the market. It’s something Musk likewise seems to have wanted since 2021. However, Biden has tied the current incentives to domestic production. Retaining American jobs is a major platform for the Trump campaign, so navigating that angle could be tricky.
[Images: ZikG/Shutterstock; Tesla Inc.]
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![Matt Posky](https://cdn-fastly.thetruthaboutcars.com/media/profile/2022/08/25/1357641_2.jpg?size=91x91)
Consumer advocate tracking industry trends and regulations. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied, he pivoted to writing about cars. Since then, he has become an ardent supporter of the right-to-repair movement, been interviewed about the automotive sector by national broadcasts, participated in a few amateur rallying events, and driven more rental cars than anyone ever should. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and learned to drive by twelve. A contrarian, Matt claims to prefer understeer and motorcycles.
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The govt never was given the power to manipulate social behavior. The socialist element in society always wants the power to control people's lives. We need to go back to being a constitutional republic or kiss our freedoms goodbye.