Tesla late Wednesday criticized the Republican megabill for gutting clean energy tax credits, a message amplified by CEO Elon Musk hours after he announced he was leaving the Trump administration.
The Impact on Energy Independence
“Abruptly ending the energy tax credits would threaten America’s energy independence and the reliability of our grid,” Tesla Energy, the company’s solar and battery division, wrote on X.
Repeal of Solar and Clean Electricity Credits
The House-passed reconciliation package would repeal the Inflation Reduction Act’s residential solar credit at the end of the year and rapidly phase down the clean electricity investment credit for all forms of generation except nuclear, disqualifying all but a few shovel-ready projects.
Termination of Electric Vehicle Credits
The bill would also terminate most credits for electric vehicles at the end of the year, disqualifying Teslas from a $7,500 incentive at a time when the company is experiencing declining sales and backlash linked to Musk’s actions to gut the federal workforce.
Growth of Tesla Energy Division
Tesla’s energy division has seen faster growth and higher profits than its vehicle business in recent years. Launched by Musk in 2015, it sells a range of solar and battery energy storage products to homeowners and utility companies.
Call for Senate Support
Tesla Energy urged the Senate to support a “sensible wind down” of the residential solar and the clean electricity investment credits, which it said would allow “continued speedy deployment of over 60 [gigawatts] capacity per year to support AI and domestic manufacturing growth.”
Musk later amplified the message on his personal X account, along with a post from another user that said “slashing solar energy credits is unjust.”
Musk’s Stand on Tax Incentives
“There is no change to tax incentives for oil & gas, just EV/solar,” Musk wrote.
Musk said last month that he would step back from his government role to devote more time to running Tesla, and he confirmed Wednesday that his tenure as a “special government employee” was coming to an end.
Shift in Position
Backing the credits is a shift in position for Musk, who has previously supported ending all government subsidies, including those for EVs and the fossil fuel industry. He has contended that ending the EV credit would help Tesla because its competitors are more reliant on it.
Dispute Over Subsidies
The oil lobby has long disputed referring to its tax breaks as “subsidies,” arguing they are in line with deductions claimed by all corporate taxpayers.
Critique of Megabill
Musk also criticized the megabill’s price tag earlier this week, saying he was “disappointed” it increases the deficit and contradicts the cost-cutting efforts of his so-called Department of Government Efficiency.
