Elon Musk
Will Tesla thrive without the EV tax credit? Five reasons why they might
Here are five reasons Tesla might be in better shape without the tax credit being available.
The $7,500 EV tax credit has officially expired, as it came to its closure at midnight on September 30. Many are wondering what will happen to the EV makers in the United States that had a huge competitive advantage over their competitors, a $7,500 discount that could be applied at the point of sale.
Tesla stands to thrive from the lack of tax credit, and although it is hard to believe, brighter days could be ahead for the company, starting with Q4, which began today.
Here are five reasons Tesla might be in better shape without the tax credit being available:
No Tax Credit Means Price Cuts
Tesla has to adjust its pricing strategy now that the $7,500 tax credit is gone, and when it lost the previous tax credit after reaching its cap in 2019, it used a more affordable model to surge sales. At the time, that more affordable model was the Model 3.
Tesla boosted deliveries by over 50 percent that year without any tax credit by simply offering a cheaper model. The credit, in a way, distorts the market, and companies, while attempting to innovate, are able to offer the discount with the help of the government.
-->Tesla price cuts push EV market toward affordability with broader influence
Companies will now have to weigh what they can discount their vehicles by to keep profits reasonable, but also stoke demand.
Ultimately, Tesla has the ability to use manufacturing and technological efficiencies to increase affordability. It has more control to fluctuate pricing, and price cuts could be on the way.
The Playing Field Becomes Fairer
Companies like Ford and General Motors have also reaped the benefits of the tax credit, but their situation is much different than Tesla’s.
Ford and GM are not profitable on their EV projects, so the EV tax credit has been relied upon to mask high production costs and dealer markups, which have widely impacted their demand. Ford is among the more popular brands that have dipped their toes into the EV market, but they have been forced to adjust their strategy on several occasions due to a lack of profits.
-->Tesla’s vehicles have been profitable for some time, and the company has been able to make money from its offerings faster. Cybertruck was profitable after just one year of production.
Tesla Cybertruck achieves positive gross margin for first time
Removing subsidies will expose the financial weaknesses of those domestic competitors, and we will likely see those companies scale back their EV efforts in the coming months and years. This will help Tesla more than having access to the tax credit would, which is something CEO Elon Musk has said for years:
First of all, Tesla hasn’t had that consumer tax credit for years & we didn’t ask for this one – GM & Ford did
— Elon Musk (@elonmusk) October 6, 2022
-->In my view, we should end all government subsidies, including those for EVs, oil and gas
— Elon Musk (@elonmusk) November 14, 2024
Tesla’s Maturity Shows and Investor Confidence Will Boost
Tesla was once dismissed as a subsidy-dependent startup, but that narrative truly died years ago, as it continued to perform well against competitors even after losing the tax credit.
Musk has said himself that the cancellation of these subsidies “will only help Tesla,” as it will highlight the company’s ability to be self-sufficient.
Elon Musk reiterates call for all subsidies on all industries to be removed
-->Using things like manufacturing efficiencies and vertical integration, Tesla has been less dependent than others on help to build its cars. If anything, investors will likely see the next few months as a make-or-break period for companies building EVs.
Subsidies Sometimes Can Inhibit True Innovation
Some companies can tend to become complacent when government subsidies are offered on their products. Instead of making things better and trying to find new ways to make cars more affordable, some can lean on the help they’re getting.
After subsidies ended for Tesla in 2019, the company achieved two major breakthroughs: the Cybertruck and its energy storage projects scaled to gigawatt-hours. The argument is not that Tesla becomes complacent with the tax credits, but the company is going to feel more pressure to fight for innovation now that its back is up against the wall.
It already offers a better product from a tech standpoint, so affordability could truly be the next major change we see.
Affordable Models Will Be Even More Sought After
Tesla will launch its affordable models this quarter, and with no more tax credit to lean on, these new cars will be what many consumers go for.
-->If Tesla can launch a model that is close to $30,000 without a tax credit, the company stands to regain a significant portion of its market share from competitors that have eroded it over the past few years. This will undercut the vast majority of electric cars that are currently offered.
- 2025 Nissan Leaf S Trim – $28,140
- 2025 Fiat 500e Base Trim – $32,500
- 2025 Chevrolet Equinox EV – $33,600
Those are the three most affordable EVs available in the U.S. right now, and those prices are without the EV tax credit. If Tesla can get close to $30,000, it will truly make a mark and there might not be all that much of a change in its yearly delivery figures.
Elon Musk
Elon Musk predicts AI and robotics could make work “optional” within 20 years
Speaking on entrepreneur Nikhil Kamath’s podcast, Musk predicted that machines will soon handle most forms of labor, leaving humans to work only if they choose to.
Elon Musk stated that rapid advances in artificial intelligence and robotics could make traditional work unnecessary within two decades.
Speaking on entrepreneur Nikhil Kamath’s podcast, Musk predicted that machines will soon handle most forms of labor, leaving humans to work only if they choose to.
Work as a “hobby”
During the discussion, Musk said the accelerating capability of AI systems and general-purpose robots will eventually cover all essential tasks, making human labor a choice rather than an economic requirement. “In less than 20 years, working will be optional. Working at all will be optional. Like a hobby,” Musk said.
When Kamath asked whether this future is driven by massive productivity growth, Musk agreed, noting that people will still be free to work if they enjoy the routine or the challenge. He compared future employment to home gardening, as it is something people can still do for personal satisfaction even if buying food from a store is far easier.
“Optional” work in the future
Elon Musk acknowledged the boldness of his claim and joked that people might look back in 20 years and say he was wrong. That being said, the CEO noted that such a scenario could even happen sooner than his prediction, at least if one were to consider the pace of the advancements in AI and robotics.
-->“Obviously people can play this back in 20 years and say, ‘Look, Elon made this ridiculous prediction and it’s not true,’ but I think it will turn out to be true, that in less than 20 years, maybe even as little as ten or 15 years, the advancements in AI and robotics will bring us to the point where working is optional,” Musk said.
Elon Musk’s comments echo his previous sentiments at Tesla’s 2025 Annual Shareholder Meeting, where he noted that Optimus could ultimately eliminate poverty. He also noted that robots like Optimus could eventually provide people worldwide with the best medical care.
Elon Musk
Elon Musk reiterates why Tesla will never make an electric motorcycle
Tesla CEO Elon Musk preemptively shut down speculations about a Tesla road bike once more.
Tesla CEO Elon Musk preemptively shut down speculations about a Tesla road bike once more, highlighting that the electric vehicle maker has no plans to enter the electric motorcycle market.
Musk posted his clarification in a post on X.
Musk’s reply to a fun AI video
X user @Moandbhr posted an AI video featuring the Tesla CEO on the social media platform, captioning it with “Mr. Elon Musk Just Revealed the Game-Changing Tesla Motorcycle.” The short clip depicted Musk approaching a sleek, single-wheeled vehicle, stepping onto it, and gliding off into the distance amid cheers. The fun video received a lot of traction on X, gaining 3.1 million views as of writing.
Musk replied to the post, stating that a Tesla motorcycle is not going to happen. “Never happening, as we can’t make motorcycles safe. For Community Notes, my near death experience was on a road bike. Dirt bikes are safe if you ride carefully, as you can’t be smashed by a truck,” Musk wrote in his reply.
Musk’s Past Comments on Two-Wheelers
Musk also detailed his reservations about motorcycles in a December 2019 X post while responding to questions about Tesla’s potential ATV. At the time, he responded positively to an electric ATV, though he also opposed the idea of a Tesla road-going motorcycle. Musk did state that electric dirt bikes might be cool, since they do not operate in areas where large vehicles like Class 8 trucks are present.
-->“Electric dirt bikes would be cool too. We won’t do road bikes, as too dangerous. I was hit by a truck & almost died on one when I was 17,” Musk wrote in his post.
Considering Musk’s comments about dirt bikes, however, perhaps Tesla would eventually offer a road bike as a recreational vehicle. Such a two-wheeler would be a good fit for the Cybertruck, as well as future products like the Robovan, which could be converted into an RV.
Elon Musk
Elon Musk gives nod to SpaceX’s massive, previously impossible feat
It was the booster’s 30th flight, a scenario that seemed impossible before SpaceX became a dominant force in spaceflight.
Elon Musk gave a nod to one of SpaceX’s most underrated feats today. Following the successful launch of the Transporter-15 mission, SpaceX seamlessly landed another Falcon 9 booster on a droneship in the middle of the ocean.
It was the booster’s 30th flight, a scenario that seemed impossible before SpaceX became a dominant force in spaceflight.
Elon Musk celebrates a veteran Falcon 9 booster’s feat
SpaceX completed another major milestone for its Smallsat Rideshare program on Friday, successfully launching and deploying 140 spacecraft aboard a Falcon 9 from Vandenberg Space Force Base. The mission, known as Transporter-15, lifted off two days later than planned after a scrub attributed to a ground systems issue, according to SpaceFlight Now. SpaceX confirmed that all payloads designed to separate from the rocket were deployed as planned.
The Falcon 9 used for this flight was booster B1071, one of SpaceX’s most heavily flown rockets. With its 30th mission completed, it becomes the second booster in SpaceX’s fleet to reach that milestone. B1071’s manifest includes five National Reconnaissance Office missions, NASA’s SWOT satellite, and several previous rideshare deployments, among others. Elon Musk celebrated the milestone on X, writing “30 flights of the same rocket!” in his post.
Skeptics once dismissed reusability as unfeasible
While rocket landings are routine for SpaceX today, that was not always the case. Industry veterans previously questioned whether reusable rockets could ever achieve meaningful cost savings or operational reliability, often citing the Space Shuttle’s partial reusability as evidence of failure.
-->In 2016, Orbital ATK’s Ben Goldberg argued during a panel that even if rockets could be reusable, they do not make a lot of sense. He took issue with Elon Musk’s claims at the time, Ars Technica reported, particularly when the SpaceX founder stated that fuel costs account for just a fraction of launch costs.
Goldberg noted that at most, studies showed only a 30% cost reduction for low-Earth orbit missions by using a reusable rocket. “You’re not going to get 100-fold. These numbers aren’t going to change by an order of magnitude. They’re just not. That’s the state of where we are today,” he said.
Former NASA official Dan Dumbacher, who oversaw the Space Launch System, expressed similar doubts in 2014, implying that if NASA couldn’t make full reusability viable, private firms like SpaceX faced steep odds.
Tesla is making a change to its exterior cameras with a potential upgrade
Tesla Model Y Standard Full Review: Is it worth the lower price?
