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Tesla won’t slow despite Edmunds claim that loss of tax credit will “kill the U.S. EV market”

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8 years ago

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Edmunds has released a new study that claims the loss of federal tax credits for EV buyers is “likely to kill the U.S. EV market.” It goes on to say, “Without these credits, this market is likely to crash.” Edmunds bases its analysis on what happened when the state of Georgia repealed its EV incentive program in the middle of 2015. Not only did Georgia eliminate its EV incentive, it also imposed new fees on EV drivers designed to offset the loss of revenue the state experienced because cars with electric motors use less gasoline.

Up until then, Georgia gave every qualifying EV buyer a $5,000 credit — the largest in the nation. That was on top of the $7,500 federal tax credit and made buying an EV in Georgia a very attractive proposition. The biggest beneficiary was the Nissan LEAF. In June, 2015 — the last month the incentive was available — 1,008 of them were sold or leased. In July, after the rebate was no longer available, 66 cars were delivered.

Cars eligible for the state incentive accounted for up to 17% of the new car market in Georgia. Following the legislature’s decision to eliminate the credit, they have fallen to about 2% of sales. Note that is still higher than the percentage of EV sales in the US as a whole.

Should Tesla be concerned? Not really says the Motley Fool. Data compiled by IHS Markit and included in the Edmunds analysis shows a drop in sales of the Model S shortly after Georgia repealed its rebate but sales quickly recovered and have since gone on to set new records for the company in the Peachtree State.

The federal tax credit was originally a pump priming exercise intended to help EV manufacturers get started. The assumption Congress made when it first enacted the credit was that once a company had sold 200,000 cars with plugs, economies of scale would begin to kick in, making it possible to build and sell electrified cars profitably without government assistance.

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Tesla is getting close to that figure and will surely pass it once the Model 3 gets into production this summer. After that, the federal tax credit for Tesla vehicles will begin to phase out. In addition, many people worry the Trump administration will kill the federal EV tax credit entirely. According to Edmunds, that means Tesla could suffer a dramatic decline in sales — at least in the US. Here’s why that won’t happen according to the Motley Fool.

Not so fast

First, any comparison between a 2015 Nissan LEAF and a 2018 Tesla Model 3 is a lopsided contest. The LEAF is a fine car but it suffers from a serious lack of range. Nor does it have any of the industry leading technology Tesla offers its customers. It relies on the CHAdeMO charging standard, which is rapidly losing ground to the CCS standard and the Tesla Supercharger network.

Red Tesla Model 3 at the vehicle unveiling event on March 31, 2016 from the company’s Hawthorne, CA Design Center.

Second, the base price of the Model 3 is $35,000, which happens to be very near the average selling price of a new passenger vehicle in the US market today. With or without incentives, the Model 3 will be highly competitive. With nearly 400,000 reservations worldwide, demand for the Model 3 is clearly not dependent on government financial incentives.

The real issue here is that electric car sales have not advanced as quickly as electric car advocates predicted. Range anxiety, lack of charging infrastructure, and fear of the unknown have kept many people from buying an electric car, whether from Tesla or any other manufacturer. The “tipping point” when electric cars become the first choice of mainstream car buyers is tantalizingly close but still not here yet.

Reasonable people may disagree about the best way to promote electric cars. Paying people to buy them may not be as beneficial to society as subsidizing the infrastructure needed to charge them. The interstate highway system was a hugely expensive undertaking but it unleashed an unprecedented surge in US economic output. Today it is still the backbone of commerce in America. Putting the money used to fund the federal EV tax credit to work building the nation’s charging infrastructure could be a more efficient use of resources.

By any analysis, the Tesla phenomenon is not dependent on government incentives. It is based on building compelling electric automobiles that outperform the competition. Elon Musk deliberately chose to start at the top of the market to attract those who influence public opinion. That strategy is working and will continue to work even if the federal tax credit is eliminated entirely.

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Tesla’s Omead Afshar, known as Elon Musk’s right-hand man, leaves company: reports

Tesla’s Head of North American sales and European ops, Omead Afshar, has reportedly left the company. He was widely-known as Elon Musk’s right-hand man.

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31 minutes ago

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June 26, 2025

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Credit: Elon Musk | X

Tesla’s Omead Afshar, who is widely known as CEO Elon Musk’s right-hand man, has reportedly left the company.

Several outlets are reporting that Afshar either left voluntarily or was potentially terminated on Thursday. His LinkedIn profile has not been updated to reflect this, and still states he presently works at Tesla in the “Office of the CEO.”

Afshar was promoted to Head of North American sales and European operations late last year. We reported on his promotion in October, as he was previously a Project Manager in the Office of the CEO before Musk and co. stepped up his responsibilities.

According to the initial report on Afshar’s departure from Bloomberg, the news has been circulating throughout the company in recent days. His name no longer appears in the company’s internal directory.

It is interesting to think about what could have caused this. Tesla has felt some pressure in Europe with struggling sales figures in some markets. It is the second-best-selling EV maker in the region, with Volkswagen performing slightly better for the year, according to EU-EVs.

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Tesla’s Model Y is the best-selling EV in the region.

While the company has not directly confirmed the news, it appears to be true based on the reports.

Tesla is usually relatively quick to dispel any headlines that go out from mainstream media that are not factual. This has yet to be responded to by any executive, including Musk.

Afshar has been with Tesla for seven years and ten months, first joining in September 2017 as a Project Manager in the Office of the CEO.

He then became a Project Director, before his job title was updated to a Cowboy hat emoji in July 2020, around the time Tesla started moving some things to Texas.

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Forbes is reporting that Afshar was terminated and did not leave voluntarily. This has yet to be confirmed.

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xAI Colossus pollution concerns in Memphis continue

NAACP & SELC push back against xAI Colossus supercomputer. City tests say air is safe — but activists aren’t convinced.

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8 hours ago

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June 26, 2025

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(Credit: xAI)

Politicians in Memphis continue to debate about the pollution concerns arising from the xAI Colossus supercomputer.

The NAACP and the Southern Environmental Law Center (SELC) have already expressed interest in filing a lawsuit against xAI over concerns related to air pollution stemming from its gas-powered turbines. Environmental groups have now raised concerns about water pollutants.

On Tuesday, Memphis released third-party air quality test results from June 13 and 16. The tests were conducted in downtown Memphis, Whitehaven, and Boxtown, two miles from xAI’s site. The city claimed levels of 10 pollutants tested were safe.

xAI receives more Tesla Megapacks for Colossus 2

However, SELC–which is representing the NAACP in a potential lawsuit against xAI–criticized the omission of a key pollutant called ozone from the air quality tests. SELC also noted that monitors were placed against buildings, contrary to EPA guidance, stating air sensors should be “at least six feet above ground level, rooftop, or other objects and away from obstructions, vegetation, or emissions sources that would interfere with the measurement.”

Local opposition intensified, with State Representative Justin J. Pearson asserting: “I stand firm that nothing matters if you cannot breathe clean air, drink clean water, and plant in clean soil.”

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On Wednesday, concerns shifted to the Memphis aquifer, as the Tennessee Department of Environment and Conservation held a virtual meeting on xAI’s wastewater facility.

Activist Pamela Moses criticized xAI. “They are not coming here to uplift or invest in our community. They are here to exploit it. This a distressed and a historically neglected area, and instead of bringing opportunity, Colossal is bringing pollution…secrecy and broken promises,” she said.

xAI’s $80 million Grey Water facility aims to mitigate water concerns. The Colossus Water Recycle Facility, a collaboration between the Tennessee Valley Authority and Nucor Steel, aims to alleviate the strain on the aquifer.

“This project is a game changer in terms of it saving about 4.7 billion gallons of water projected, and about 4.7 billion gallons will remain in the aquifer every year,” said Bobby White of the Greater Memphis Chamber.

As xAI’s Memphis supercomputer continues to be the center of debates, the tension between economic benefits and environmental justice remains unresolved. With ongoing scrutiny and potential legal action, xAI’s efforts to address pollution and water concerns will shape its role in Memphis’ future.

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Tesla Robotaxi’s biggest challenge seems to be this one thing

That big bright thing in the sky might be Tesla’s biggest challenge in terms of Robotaxi.

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22 hours ago

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June 25, 2025

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Credit: Tesla

Tesla Robotaxi launched just a few days ago to a limited number of riders in Austin, Texas, but its biggest challenge seems to be how the automaker will figure out one thing: the Sun.

Among the company’s unique strategies, its emphasis on using cameras for self-driving is perhaps the most interesting. No other company has adopted the same strategy, as others have relied on cameras with either sensors or LiDAR rigs to accomplish their self-driving deployments.

Tesla, on the other hand, has called LiDAR unnecessary. CEO Elon Musk once called it “a fool’s errand,” stating it was not needed to build an effective self-driving fleet of vehicles.

Musk compared cameras to eyes. Humans don’t need sensors or LiDAR to operate vehicles on the road, so why should cars? This brought up some questions, especially regarding sun glare. Musk said that Tesla would use direct photon counting to see directly into brigt sunlight or even in the darkest conditions at night.

His quote during a recent earnings call was:

“Actually, it does not blind the camera. We use an approach which is direct photon count. When you see a processed image, so the image that goes from the sort of photon counter — the silicon photon counter — that then goes through a digital signal processor or image signal processor, that’s normally what happens. And then the image that you see looks all washed out, because if you point the camera at the sun, the post-processing of the photon counting washes things out.”
So far, this strategy has yielded mixed results. We have seen examples of both:

The Good

We’ve had a handful of people state that they have had no issue using the Robotaxi when it is driving into direct sunlight.

There are plenty of examples:

The Bad

The Verdict

This is obviously a weird case, and it seems that this could be one of the challenges Tesla will face with the deployment of Robotaxi.

While it will get figured out, this is something that could ultimately push back Tesla’s goal of having no safety monitor in the vehicles. However, the instance will be learned and used to improve in the future through its Neural Nets.

The first intervention was captured yesterday, requiring the Tesla safety monitor to stop the vehicle manually on the car’s touchscreen.

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