3 ways Trump’s policy bill hurts Tesla
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Elon Musk has been feuding with President Trump over a bill the president is championing that, among other things, cuts incentives for electric vehicles and solar energy that benefit Musk’s company Tesla.

Trump said Musk’s vocal opposition to Republicans’ “big, beautiful bill” is based on its elimination of incentives for electric vehicles (EVs).

“Elon knew the inner workings of this bill better than almost anybody sitting here. … He had no problem with it,” Trump told reporters in the Oval Office.

“All of a sudden he had a problem, and he only developed the problem when he found out that we’re going to have to cut the EV mandate, because that’s billions and billions of dollars,” he added.

While the bill may not be all bad for Musk – including preserving Trump’s 2017 income tax cuts – it contains significant provisions that impact Musk’s flagship company. It also rolls back green-tax incentives.

Since he’s stepped away of the Trump administration, the entrepreneur has been a vocal critic of the legislation, including lamenting that “there is no change to tax incentives for oil & gas, just EV/solar.” 

While the House narrowly passed its version of the bill in late May, it is facing hurdles in the Senate, where it is so far losing some momentum. 

Here’s a look at the provisions that may be particularly impactful for the company – as well as other electric vehicle and climate-friendly energy companies:

Eliminates EV tax credits 

One major way in which the “big, beautiful bill” harms Tesla is by making its cars more expensive. 

The Democrats’ 2022 Inflation Reduction Act lifted a cap allowing manufacturers that had already sold more than 200,000 electric vehicles to once again be eligible for the $7,500 consumer tax credit. It also extended eligibility for the credit through 2032

The bill effectively made the cars $7,500 cheaper for consumers.

But, the credits are cut in the GOP’s bill. Without that credit, Tesla and other EV makers may make fewer sales. One major hurdle facing the adoption of electric vehicles is that they are oftentimes more expensive than gas-powered cars.

However, Musk has contended when he was supporting Trump that he does not need the tax credit.

Cuts credits for solar energy

Tesla Energy sells both rooftop solar energy and grid scale solar power – both of which are hampered by the Republican bill.

The legislation axes tax credits for rooftop solar after this year.

It also eliminates tax credits for any grid scale project that begins construction more than 60 days after the bill is enacted. Projects also need to begin producing energy by the end of 2028 to become eligible.

These utility scale cuts are controversial even within the GOP and could face changes in the Senate.

Axes Biden-era EV regulations

The legislation would eliminate a Biden-era regulation that forces the electric vehicle market to shift toward EVs. 

While Tesla is already all-electric, doing so could still impact its bottom line, as the way the regulations are set up, automakers either have to make their vehicles greener or purchase credits from automakers like Tesla that already outperform the regulations.

If the regulation is weakened, traditional car manufacturers may not have to buy as many credits from EV-makers like Tesla.

However, it’s not clear whether this provision will make it into what’s ultimately passed because it will first need to be approved by the Senate parliamentarian, which sets the rules for what types of provisions are eligible in legislation passed through a procedure that requires just 50 votes.

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