News
Automakers handed a win with updated EV tax credit guidance in the U.S.
The White House issued new guidance on federal electric vehicle (EV) tax credits this week, including a key exemption that’s considered a win for many automakers, as it offers extra time for companies attempting to set up battery production operations in the U.S. to switch to domestic minerals.
The U.S. Treasury announced the new tax credit guidance on Friday, and General Motors and some other automotive groups have since responded to the news (via Reuters). Notably, the guidance includes a slight reprieve from stricter rules around battery mineral sourcing after the Biden administration has been considering plans to introduce the changes in the past several days.
Although the updated guidance is stricter overall and is meant to help wean the U.S. battery supply chain off of China and other sources, it also includes a temporary exemption to the rules that would block incentives for vehicles utilizing critical battery materials from China and other countries that are considered “Foreign Entities of Concern” (FEOC).
Under the guidance, the FEOC rules will take effect in 2024 for completed batteries, while the limitation won’t apply to the trace critical minerals used in the batteries until 2025. According to the U.S. Treasury, the minerals exempted represent under 2 percent of the value of critical battery minerals.
The Energy Department said that companies would be deemed FEOC if they were owned or controlled by a named foreign government, adding that they’ll be considered ineligible if an entity of concern holds 25 percent or more of the entity’s board seats, equity or voting rights. These countries include North Korea, China, Russia and Iran.
The Alliance for Automotive Innovation, a group representing most automakers in the U.S., called the decision to exempt trace materials for the next two years “significant and well-advised,” noting that several more vehicles would have been made ineligible under the originally proposed rules.
The new rules are expected to significantly limit the number of EVs that are eligible for the credit, and it also immediately disqualified any vehicles that weren’t assembled in the U.S.
Ford has been awaiting the new guidance to determine whether an upcoming battery plant project in Michigan with Chinese battery maker CATL would allow produced vehicles to be eligible. Neither the Biden administration nor Ford has commented on the new guidance at the time of writing, so it isn’t yet clear if the Michigan plant’s EVs will be eligible for the tax credits.
GM responded to the updated guidance on Friday, as detailed in a separate report from Reuters.
“Due to GM’s historic investments in the U.S and efforts to build more secure and resilient supply chains we believe GM is well positioned to maintain the consumer purchase incentive for many of our EVs in 2024 and beyond,” the automaker said following the release of the updated guidance.
Crucially, the updated tax credit rules will also let EV buyers gain instant access to their rebates, rather than the current model in which consumers must wait until tax season.
Used Teslas now qualify for $4k tax credit, but there’s a tough hoop to jump through
What are your thoughts? Let me know at zach@teslarati.com, find me on X at @zacharyvisconti, or send your tips to us at tips@teslarati.com.
Investor's Corner
Tesla investor Calpers opposes Elon Musk’s 2025 performance award
Musk’s 2025 pay plan will be decided at Tesla’s 2025 Annual Shareholder Meeting, which will be held on November 6 in Giga Texas.
One of the United States’ largest pension funds, the California Public Employees’ Retirement System (Calpers), has stated that it will be voting against Elon Musk’s 2025 Tesla CEO performance award.
Musk’s 2025 pay plan will be decided at Tesla’s 2025 Annual Shareholder Meeting, which will be held on November 6 in Giga Texas. Company executives have stated that the upcoming vote will decide Tesla’s fate in the years to come.
Why Calpers opposes Musk’s 2025 performance award
In a statement shared with Bloomberg News, a Calpers spokesperson criticized the scale of Musk’s proposed deal. Calpers currently holds about 5 million Tesla shares, giving its stance meaningful influence among institutional investors.
“The CEO pay package proposed by Tesla is larger than pay packages for CEOs in comparable companies by many orders of magnitude. It would also further concentrate power in a single shareholder,” the spokesperson stated.
This is not the first time Calpers has opposed a major Musk pay deal. The fund previously voted against a $56 billion package proposed for Musk and criticized the CEO’s 2018 performance-based plan, which was perceived as unrealistic due to its ambitious nature at the time. Musk’s 2018 pay plan was later struck down by a Delaware court, though Tesla is currently appealing the decision.
Musk’s 2025 CEO Performance Award
While Elon Musk’s 2025 performance award will result in him becoming a trillionaire, he would not be able to receive any compensation from Tesla unless aggressive operational and financial targets are met. For Musk to receive his full compensation, for example, he would have to grow Tesla’s market cap from today’s $1.1 trillion to $8.5 trillion, effectively making it the world’s most valuable company by a mile.
Musk has also maintained that his 2025 performance award is not about compensation. It’s about his controlling stake at Tesla. “If I can just get kicked out in the future by activist shareholder advisory firms who don’t even own Tesla shares themselves, I’m not comfortable with that future,” Musk wrote in a post on X.
News
Tesla Cybercab is heading to China’s import expo
The event will take place from November 5–10 at Shanghai’s National Exhibition and Convention Center.
Tesla will make its return to the China International Import Expo (CIIE) this November, marking its first appearance at the event since 2022. The U.S. electric vehicle maker confirmed it will showcase its highly anticipated Cybercab, which will make its Asia-Pacific debut during the event.
The expo will take place from November 5–10 at Shanghai’s National Exhibition and Convention Center.
Tesla Cybercab in China
Tesla announced its participation in the event on its official Weibo account. As per the electric vehicle maker, it would be occupying Booth A3-03 in Hall 2.1 at the National Exhibition and Convention Center. As noted in a CNEV Post report, the Cybercab, the company’s dedicated autonomous two-seater Robotaxi, will be making its Asia-Pacific debut at the CIIE as well.
The company shared a graphic on Chinese social media which showed an image featuring several Tesla products, such as the Cybercab, Optimus, and Megapack batteries. The graphic also featured a building that read “Master Plan Part IV.”
Tesla’s momentum in China
Tesla’s return comes after skipping the event last year. Interestingly enough, Tesla attended the event from 2018 all the way to 2023. Tesla’s return to the CIIE then aligns with the company’s efforts to attract consumer interest in the world’s most competitive electric vehicle market.
The Cybercab’s presence in the event could suggest that Tesla might be interested in bringing its Robotaxi to the country. This is quite interesting as China is already home to several autonomous ride-hailing services, though Tesla’s pure vision approach, which focuses on artificial intelligence and cameras, is quite unique. So far, Tesla has only rolled out its autonomous ride-hailing services in Austin, Texas, and the Bay Area, California.
News
Tesla Semi factory looks nearly complete
Based on recent images taken of the facility, it appears that the Semi’s initial production might be right on schedule.
The Tesla Semi factory looks like it is nearing completion. Based on recent images taken of the facility, it appears that the Semi’s initial production might be right on schedule.
This was, at least, as per recent observations from a veteran Tesla watcher who has long been chronicling the progress of the facility.
Tesla Semi factory today
As per longtime Tesla Semi advocate @HinrichsZane, the Class 8 all-electric truck’s factory in Nevada looks almost completed. The facility’s exterior looks finished, which suggests that much of the work being done today is likely focused on the factory’s interior and equipment.
This was highlighted in recent photos taken by the drone operator, which show that the facility’s parking lots are now filled with vehicles. A photo taken before dawn also highlighted just how refined the factory has become over the past months. Needless to say, it appears that the factory is all but ready to start the initial production of the Tesla Semi.
Deliveries and targets
Tesla has stated that the Semi factory will start producing the Class 8 all-electric truck by 2026. This was stressed by Elon Musk in a previous comment on X, when he stated that “Tesla Semi will be in volume production next year.” Once ramped, the facility will be capable of producing about 50,000 Tesla Semi units annually. This should help the Semi disrupt and potentially saturate the United States’ transport sector.
Progress in the Tesla Semi factory has been notable in the past months. Just a few months ago, drone footage of the site revealed that Tesla was shipping extremely large production equipment into the facility. These included what appeared to be a gigantic stamping machine that was so large and heavy that it was shipped to the Semi factory using two diesel trucks and a triple trailer.
Tesla investor Calpers opposes Elon Musk’s 2025 performance award
Tesla Cybercab is heading to China’s import expo
Tesla Semi factory looks nearly complete
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