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Tesla set to benefit as Congress considers EV tax credit extension
Tesla, General Motors and other automakers are pushing Washington for tax extenders that would extend the federal incentive for electric vehicle purchases.
Talks in the U.S. Congress over the weekend focused on the reinstatement of tax extenders that will not only benefit electric car manufacturers but those involved in biofuel and short-line railroad industries. If the Growing Renewable Energy and Efficiency Now (GREEN) Act gets the thumbs up, the cap for EV sales for manufacturers will be raised to 600,000 from 200,000 units and also reduce the tax credit from $7,500 to $7,000.
There will also be tax credits for the purchase of used electric vehicles with certain limitations such as the vehicle was used and registered in the U.S., will be sold for less than $25,000, tax credit can’t exceed 30 percent of the selling price, among others.
“Thanks to bipartisan, broad-based support, we believe the EV tax-credit extension is very well-positioned for enactment. “A large and diverse set of stakeholders — including environmentalists, public health groups, automakers and utilities — are urging Congress to act given its consequences for American global competitiveness, clean air and climate change,” said Mike Carr of the EV Drive Coalition that consists of Tesla, GM, and other electric vehicles and equipment giants.
The current tax credit is phased out when a manufacturer such as Tesla hits 200,000 vehicle sales, a cap already reached by Tesla and GM in Q3 2018 and Q4 2018, respectively. This means that those who will buy Tesla electric vehicles starting January 1, 2020 are no longer eligible for tax credits. Under the current rules, Tesla vehicles delivered on or before Dec. 31, 2018 enjoyed $7,500 federal tax credit while those delivered between Jan. 1 to June 30 this year received incentives reduced by half. Those who got their Teslas July 1 through the end of this year only received $1,875 tax credits.
Originally, the tax credit for electric vehicles was enacted by Congress in 2008 to give the EV market a boost. The tax credit is a big factor in the purchase decision of car buyers when considering electric vehicles. Aside from benefiting consumers directly by making electric vehicles — such as the upcoming Tesla Cybertruck — more affordable, a proper reform levels the playing field for vehicle manufacturers while giving consumers more options to choose from.
The GREEN Act discussion draft was initiated in November by House Ways and Means Subcommittee on Select Revenue Measures Chairman Mike Thompson and Committee Democrats.
“This bill will build on existing tax incentives that promote renewable energy and increase efficiency and create new models for technology and activity to reduce our carbon footprint. I’ve long said that if we don’t address climate change, nothing else matters as we won’t have a planet to pass on to our next generation. The GREEN Act is a critical step forward in our fight to tackle climate change head on,” Chairman Thompson said.
Of course, the lobbying of Tesla and other EV manufacturers does not go unopposed. In June, a trade association representing fuel and petrochemical manufacturers and refiners met with members of Congress to insist on how tax breaks may cost the government as much as $15.7 billion over 10 years. Meanwhile, proponents and supporters of the GREEN Act that would provide tax extenders emphasized the benefits of more electric vehicles on the road in terms of sustainability, how the industry creates American jobs, and how it helps the U.S. ensure energy independence and security.
As 2019 draws to a close, Tesla adjusted the price of the Model 3 and also sent out an email to encourage consumers to place their orders to still be eligible for the federal tax credit.
Elon Musk
SpaceX issues statement on Starship V3 Booster 18 anomaly
The incident unfolded during gas-system pressure testing at the company’s Massey facility in Starbase, Texas.
SpaceX has issued an initial statement about Starship Booster 18’s anomaly early Friday. The incident unfolded during gas-system pressure testing at the company’s Massey facility in Starbase, Texas.
SpaceX’s initial comment
As per SpaceX in a post on its official account on social media platform X, Booster 18 was undergoing gas system pressure tests when the anomaly happened. Despite the nature of the incident, the company emphasized that no propellant was loaded, no engines were installed, and personnel were kept at a safe distance from the booster, resulting in zero injuries.
“Booster 18 suffered an anomaly during gas system pressure testing that we were conducting in advance of structural proof testing. No propellant was on the vehicle, and engines were not yet installed. The teams need time to investigate before we are confident of the cause. No one was injured as we maintain a safe distance for personnel during this type of testing. The site remains clear and we are working plans to safely reenter the site,” SpaceX wrote in its post on X.
Incident and aftermath
Livestream footage from LabPadre showed Booster 18’s lower half crumpling around the liquid oxygen tank area at approximately 4:04 a.m. CT. Subsequent images posted by on-site observers revealed extensive deformation across the booster’s lower structure. Needless to say, spaceflight observers have noted that Booster 18 would likely be a complete loss due to its anomaly.
Booster 18 had rolled out only a day earlier and was one of the first vehicles in the Starship V3 program. The V3 series incorporates structural reinforcements and reliability upgrades intended to prepare Starship for rapid-reuse testing and eventual tower-catch operations. Elon Musk has been optimistic about Starship V3, previously noting on X that the spacecraft might be able to complete initial missions to Mars.
Investor's Corner
Tesla analyst maintains $500 PT, says FSD drives better than humans now
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Tesla (NASDAQ:TSLA) received fresh support from Piper Sandler this week after analysts toured the Fremont Factory and tested the company’s latest Full Self-Driving software. The firm reaffirmed its $500 price target, stating that FSD V14 delivered a notably smooth robotaxi demonstration and may already perform at levels comparable to, if not better than, average human drivers.
The team also met with Tesla leaders for more than an hour to discuss autonomy, chip development, and upcoming deployment plans.
Analysts highlight autonomy progress
During more than 75 minutes of focused discussions, analysts reportedly focused on FSD v14’s updates. Piper Sandler’s team pointed to meaningful strides in perception, object handling, and overall ride smoothness during the robotaxi demo.
The visit also included discussions on updates to Tesla’s in-house chip initiatives, its Optimus program, and the growth of the company’s battery storage business. Analysts noted that Tesla continues refining cost structures and capital expenditure expectations, which are key elements in future margin recovery, as noted in a Yahoo Finance report.
Analyst Alexander Potter noted that “we think FSD is a truly impressive product that is (probably) already better at driving than the average American.” This conclusion was strengthened by what he described as a “flawless robotaxi ride to the hotel.”
Street targets diverge on TSLA
While Piper Sandler stands by its $500 target, it is not the highest estimate on the Street. Wedbush, for one, has a $600 per share price target for TSLA stock.
Other institutions have also weighed in on TSLA stock as of late. HSBC reiterated a Reduce rating with a $131 target, citing a gap between earnings fundamentals and the company’s market value. By contrast, TD Cowen maintained a Buy rating and a $509 target, pointing to strong autonomous driving demonstrations in Austin and the pace of software-driven improvements.
Stifel analysts also lifted their price target for Tesla to $508 per share over the company’s ongoing robotaxi and FSD programs.
Elon Musk
SpaceX Starship Version 3 booster crumples in early testing
Photos of the incident’s aftermath suggest that Booster 18 will likely be retired.
SpaceX’s new Starship first-stage booster, Booster 18, suffered major damage early Friday during its first round of testing in Starbase, Texas, just one day after rolling out of the factory.
Based on videos of the incident, the lower section of the rocket booster appeared to crumple during a pressurization test. Photos of the incident’s aftermath suggest that Booster 18 will likely be retired.
Booster test failure
SpaceX began structural and propellant-system verification tests on Booster 18 Thursday night at the Massey’s Test Site, only a few miles from Starbase’s production facilities, as noted in an Ars Technica report. At 4:04 a.m. CT on Friday, a livestream from LabPadre Space captured the booster’s lower half experiencing a sudden destructive event around its liquid oxygen tank section. Post-incident images, shared on X by @StarshipGazer, showed notable deformation in the booster’s lower structure.
Neither SpaceX nor Elon Musk had commented as of Friday morning, but the vehicle’s condition suggests it is likely a complete loss. This is quite unfortunate, as Booster 18 is already part of the Starship V3 program, which includes design fixes and upgrades intended to improve reliability. While SpaceX maintains a rather rapid Starship production line in Starbase, Booster 18 was generally expected to validate the improvements implemented in the V3 program.
Tight deadlines
SpaceX needs Starship boosters and upper stages to begin demonstrating rapid reuse, tower catches, and early operational Starlink missions over the next two years. More critically, NASA’s Artemis program depends on an on-orbit refueling test in the second half of 2026, a requirement for the vehicle’s expected crewed lunar landing around 2028.
While SpaceX is known for diagnosing failures quickly and returning to testing at unmatched speed, losing the newest-generation booster at the very start of its campaign highlights the immense challenge involved in scaling Starship into a reliable, high-cadence launch system. SpaceX, however, is known for getting things done quickly, so it would not be a surprise if the company manages to figure out what happened to Booster 18 in the near future.
SpaceX issues statement on Starship V3 Booster 18 anomaly
Tesla analyst maintains $500 PT, says FSD drives better than humans now
