The Build Back Better Bill Will Give You $12,000 for Buying an Electric Car. Unless It’s a Tesla.

“As part of Biden’s plan to rein in carbon emissions, the bill contains a provision which would provide a $7,500 tax rebate to any consumer who purchases an electric vehicle (EV), including both all-electric and plug-in hybrids. However, that amount increases by $4,500 if the car was manufactured in a unionized U.S. factory, as well as by an additional $500 if the vehicle contains a U.S.-made battery.

Ostensibly, this provision is part of Biden’s “Buy American” policy of incentivizing or mandating purchases to be made domestically. In practice, the order has simply carried over the protectionism of the Trump trade policy and increased costs to taxpayers. The EV credit proposal, though, is much more egregious, in that it not only incentivizes a particular type of product, but incentivizes particular brands, as well.

If enacted as written, the bonus $4,500 in EV credits could only apply to cars made by Ford, General Motors, and Stellantis (formerly Fiat Chrysler). In other words, a driver who wants to purchase a hybrid Toyota Camry, which U.S. News & World Report ranks as having “Great” reliability, does not qualify for the extra money, even though the car is manufactured in Kentucky. But if that same shopper elects to purchase a Chevrolet Bolt, which recently halted production because the batteries were catching fire, they would receive the extra rebate. As a matter of fact, out of more than 50 EVs currently on the market, the only vehicles which currently qualify for the extra money are two variations of the Bolt.

This is what is most pernicious about this policy: Rather than simply a blanket advantage for American companies (which would be bad enough), it is a clear giveaway to the United Auto Workers (UAW).”

Tesla Wouldn’t Be Tesla Without Stimulus Spending

“About a month after Barack Obama won the presidency, a cash-strapped Elon Musk made it clear that Tesla Inc.—then a boutique maker of a $109,000 sports car—would have to delay the rollout of a less expensive electric sedan unless it got government support. It was the middle of what was then the worst American financial collapse since the Great Depression, and the markets had just taken too much of a beating. “We can’t move forward with that without a major amount of capital,” the chief executive officer said in an interview in December 2008.

Musk’s plea was well-timed: The incoming president was keen to use part of the approximately $800 billion stimulus package his team was preparing to create a new green energy economy. One year after Obama took office, Tesla got a $465 million federal loan to design electric vehicles and build them at a manufacturing plant in Fremont, Calif. The company went public shortly thereafter, repaid the loan early, mainstreamed the electric vehicle, and now employs about 20,000 people in the Bay Area alone. It has the second-largest market capitalization of any automaker worldwide.

More than a decade after the financing came through, former heads of the office that approved it—a division of the U.S. Department of Energy known as the Loan Programs Office—point to the Tesla story as a best-case scenario for federal energy investment.”