The new electric vehicle tax credit proposals, which are part of the “Cut Inflation Act 2022”, although broadly supportive of the industry, have left some Tesla, Inc. TSLA disappointed fans.
Tesla supporters are crying foul: Tesla influencer and YouTuber Rob Maurer On Friday, Twitter shared an open letter to members of Congress to reconsider the “too rewarding” provision of plug-in hybrid electric vehicle (PHEV) production.
The proposal recommends that PHEVs, with battery capacity as low as 7 kilowatt-hours, receive the maximum credit of $7,500, he noted. This compares to the maximum credit of $3,334 allowed for this class of vehicle under current legislation, he added.
His claim was that real-world testing has proven that the role of PHEVs in emissions control has been “significantly overstated” and that it is difficult to justify such heavy credit for low-capacity PHEVs.
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Maurer cited Bloomberg New Energy Finance estimates that showed EV batteries cost $132 per kWh, and by extension, a 7 kWh battery could cost just $924. In contrast, a low-emission all-electric vehicle battery requires a battery capacity of 50 to more than 100 kWh, which costs around $6,600 to $13,200, he added.
He recommended revising the proposal to either increase the 7kWh requirement to align with proportionate battery costs or reduce the maximum credit allowed for vehicles with low battery capacity.
Musk replies: Quote-tweet Maurer’s tweet that carried the text of the letter as an image, Tesla CEO Elon Musk said, it might be time to move away from PHEVs. “Good point. Time to move on from hybrid cars. It was a phase,” he said.
Good point. It’s time to move on from hybrid cars. It was a step.
— Elon Musk (@elonmusk) July 30, 2022
Shares of Tesla closed Friday’s session up 5.78% at $891.45, according to data from Benzinga Pro.
Photo: Created with an image by Steve Jurvetson on Flickr