Readers who have been with us for a while knew this but it is nice to have confirmation from someon in the belly of the beast.
From InsideEVs, October 1:
“Customers are not interested in a $75,000 electric vehicle," Ford's CEO said. So what comes next for the industry as the tax credit ends?
It’s the first of October, which means the electric-vehicle tax credit is officially dead, having passed away in the wee hours of the morning. Speaking of “morning”, we, and more than a few auto companies, are mourning its death.
It's no secret that the EV tax credit was a boon to the industry. That $7,500 credit helped a lot of buyers afford EVs, whether it was via a purchase incentive done right at the point of sale or placed into a lease. We're already starting to understand the fallout of what this will mean for the EV industry as a whole. And the chief of one big American automaker says it's already putting a damper on his plans.
Welcome back to Critical Materials, your one-stop shop for the biggest news in the EV world. Today, we’re focusing on early reactions to the EV tax credit’s impact, and what it will mean for consumers now that it’s dead. Let’s hop right in, folks.
30%: Ford Says Expect EV Market To Halve
Man, EV companies can’t catch a break, huh? For a long time, the U.S. EV market was heavily reliant on Tesla for a lot of reasons; the cars themselves were kind of the only game in town that was worth a damn to the average consumer.
Range, price and general usability hit all of the sweet spots with consumers, especially with the (relatively) reasonably priced Model 3 and Model Y. Add in the tax credit, and things were good for Tesla.
And now that other automakers are finally starting to catch up, they’ve been cut off at the knees. The tax credit was a large incentive for American car buyers, and now it's gone. According to reporting from Fortune, Ford CEO Jim Farley said that the death of the EV tax credit could cut the industry in half:
Ford CEO Jim Farley, speaking at the Ford Pro Accelerate summit in Detroit on Tuesday, said he sees a huge impact from the policy change.
While he still sees EVs being a “vibrant industry” going forward, it’s also “going to be smaller, way smaller than we thought.” He called the end of the $7,500 consumer incentive a game-changer and said he wouldn’t be surprised if EV sales in the U.S. go down to 5% of the industry from the current level of roughly 10% to 12%. The most recent forecast from J.D. Power and GlobalData estimated that EVs would account for 12.2% of new-vehicle sales in September 2025....
....MUCH MORE
We have dozens, if not hundreds, of posts on this topic, stretching back to 2022 or so.
Some that pop up on a quick search of the blog:January 2024 - "China could be on track to dominate the world’s EV market, even if not in the U.S."
Elon Musk, who seems to have some insight into the industry, says there will be 10 surviving manufacturers, 9 of them Chinese.*
Because their current business is being mandated and legislated out of existence the Western marques, barring some serious breakthroughs in small-scale hydrogen or methanol, will have to pivot to EV's.March 2024 - This Will Be A Bloodbath: "Biden Set to Crack Down on Auto Emissions to Accelerate EV Sales"
And they won't be able to compete.It almost appears that the gifting of the electric vehicle and solar industries to the Chinese was deliberate.
First up, from Electrical Engineering Times, December 6....
The net effect of this order will be to give the Chinese the auto industry.*
And maybe that's the intent....
May 2024 - "Tesla’s in China – It’s just a question of how long" (TSLA)
The writer appears to think Mr. Musk is a naïf or even a Candide, blissfully unaware that all may not be for the best in this best of all possible worlds.
Wrongo, Bucko. Musk has a minor depression, possibly akin to Churchill's “Black Dog” that leads him to catastrophize worst case scenarios without succumbing to the debilitating effects (learned helplessness, hopelessness, suicide) you'd look for in a victim of a major depression.
He would be a good risk manager. The ketamine probably helps.
May 17, 2024
Reuters Exclusive: Musk pushes plan for China data to power Tesla's AI ambitions (TSLA)
Mr. Musk is walking a tightrope between American and Chinese national security concerns and more probably the use of faux concerns as an excuse to rein him in should doing so seem like the thing to do for either government.We wish him luck and think he will succeed with the autonomous vehicle push but the risks increase with dependency on governmental goodwill.
The point is deadly serious, you had better know what you are up against when venturing into the big kids' sandbox. Our first inductee into the Climateer Hall of Fame was deadly serious as well:
...As always, heed the wise words of our first inductee into the Climateer Hall of Fame....*****....On the issue of the Chinese government attitude toward controlling information, its uses and its flows, the October 2019 post "So You Want To Do Business In China Do You? "China’s New Cybersecurity Program: NO Place to Hide" embedded in a post last week is a quick primer on what the Party and government think.
As Intel's Andy Grove famously said:
Mr. Musk has his blind spots but China sneaking up on Tesla probably isn't one of them. He knows that Western companies will eventually lose the battle for electric vehicle dominance and something that he saw sometime in the last couple years seems to have scared him into action on the fronts where Tesla has a competitive advantage: access to some truly brilliant people; artificial intelligence facilitated by a long history with Nvidia and autonomous vehicles.
So again, we wish him luck, and think he'll succeed but this stuff is serious business.
Here's the stock price action over the last year:
June 2024 - Morgan Stanley Analyst Adam Jonas Writes A Love Letter To Tesla (TSLA)
A confession of bullish bias up front, from April 24's "Tesla Q1 2024 Earnings Call Transcript (TSLA)":
In pre-market action the stock is up $17.47 (+12.07%) at $162.15.
Below are the words that are adding billions ($50+) to the company's valuation.
Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....
More from that post after the jump.
As noted July 8 with the stock at $249.07: "Chartology: Tesla Stock Now Has A Very Wide Range To Churn Through (TSLA)". And September 5 A Word Of Caution On Tesla's Stock (TSLA):
Now don't get me wrong, I'm as much into Elon's/Baidu's/Nvidia's vision of flying cars and robotaxis as the next person and haven't changed this opinion on the company from April 24's "Tesla Q1 2024 Earnings Call Transcript (TSLA)":
...In pre-market action the stock is up $17.47 (+12.07%) at $162.15.
....One quibble. The line "Tesla has relied on price cuts since late 2022..." reads like a bad thing but the fact of the matter is that the entire industry has been cutting prices and Tesla getting out in front of that reality has kept them competitive in the battery-electric-vehicle business.
As we've been saying for quite a while now, Mr. Musk saw something a couple years ago that led him to a) the price cuts and production efficiencies that are proving crucial to survival in not just EV's but in the wider automobile market as well. Volkswagen talking about possibly laying off 30,000 of their German employees was inconceivable five years ago. And b) whatever it was he saw also led to the emphasizing of things they been working on for a decade: robotaxis and AI and supercomputers and robots.
So, for patient reader, having read this far, here's my two cents worth:
Deliveries will be in-line this month and the next few months and the robotaxi unveil will be written up as a bust. The people who write the headlines hate Elon Musk and nothing he does will ever, ever change that. The financial question is: will the self-driving taxis be contributing to sales and earnings in two years?
Based on the fact that Waymo is now booking 100,000 rides per week I think the answer is yes but your mileage may vary. To repeat the comment on the April earnings call transcript:
Personally I think Musk is going to pull it off, but that's just me—perhaps informed by posting on the company and its stock since before the June 2010 share flotation (which, adjusted for the 5:1 and 3:1 stock splits gives a $1.133 IPO price)—however, there are plenty of other opinions to choose from if one doesn't care for that one....
In late pre-market action the stock is trading up $1.17 (+0.45%) at $262.80 after closing Monday at $261.63 also up $1.17 (+0.45%).
October 1, 2025: TSLA $459.46 last, up $14.74 (3.31%)