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Tesla share crash amid Republican bid to kill off electric car tax break

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posted on Nov, 3 2017 @ 12:58 PM
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Shifting production from the S to the 3 and missing key manufacturing goals was having an effect on Tesla stock. Now there is a plan to kill the tax payer credit for the purchase of electric cars, like the Tesla model 3. Tesla's stock is taking it in the britches.


Tesla's share price took a dive Thursday morning as Republicans in Congress revealed they were planning to kill off a US federal tax credit for electric vehicles.

The proposed House tax bill calls for an immediate repeal of the $7,500-per-vehicle credit: something that would have an immediate knock-on impact for Tesla given that it only produces electric cars.
www.theregister.co.uk...

But hold the phone, there are other companies that are going to feel the pinch of not being able to lower costs with Federal tax credit. GM is concerned because this helps get the cars out there and gain acceptance. And in California if a car company doesn't sell a certain % of electric cars they get to buy "green" credits. Wonder who that will enrich?


It's not just Tesla that will be hard hit by the removal of the federal tax credit: General Motors has been pushing its Chevy Bolt electric car, and under California state law, it is required to sell a certain percentage of electric cars each year or effectively pay for not doing so by purchasing green credits.

GM said in a statement following the news: "Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles. Because General Motors believes in an all-electric future, we will work with Congress to explore ways to maintain this incentive."

Tesla has yet to respond – even though the markets have already spoken. ®


Is this the push companies like Tesla-GM need to get serious about getting these cars made and sold? Or is it a death blow to a tech that may not quite be ready for prime time?


.
edit on 3-11-2017 by seasonal because: (no reason given)



+5 more 
posted on Nov, 3 2017 @ 01:03 PM
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If they can't make an affordable and profitable product without tax breaks, they don't deserve to be in business. That's my opinion of course.



posted on Nov, 3 2017 @ 01:10 PM
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a reply to: Middleoftheroad

Gas isn't going to be under 3 dollars a gallon for long.

Why not start making a shift and get energy independence?

Or are you a fan of Saudi Arabia's tyrannical and oppressive government existing because of us?



posted on Nov, 3 2017 @ 01:14 PM
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I'm okay with a Tax break for electric cars.

I'm usually of the opinion that if a business can't succeed then let it fail until a good business model comes along and they can succeed. There is definitely a demand for electric cars and Tesla has shown that they can be profitable.

Keep in mind that our government bailed out the auto industry with billions upon billions of dollars and that coal and oil industry get huge tax breaks every year. Why not level the playing field? If your going to give GM, Ford and Chevy tax breaks why not Tesla? If your going to give Oil, Coal and fracking companies billions in Tax breaks why not solar and wind power too?

Either Give them all a break or non of them. Let's not be specific just because we like oil or combustion engine cars better than solar and electric cars.
edit on 3-11-2017 by amazing because: (no reason given)



posted on Nov, 3 2017 @ 01:17 PM
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a reply to: amazing

I've always had a problem with the term "giving a tax break". It isn't the Government's money in the first place so it doesn't "give" anything.



posted on Nov, 3 2017 @ 01:22 PM
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a reply to: amazing

I'm thinking the big auto makers in the US are a little worried about Tesla.
Chevy has been making some electric cars that are starting to rival Tesla's model 3, the Bolt even has more range, and is cheaper. Something is going on.



posted on Nov, 3 2017 @ 01:25 PM
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originally posted by: CriticalStinker
a reply to: Middleoftheroad

Gas isn't going to be under 3 dollars a gallon for long.

Why not start making a shift and get energy independence?

Or are you a fan of Saudi Arabia's tyrannical and oppressive government existing because of us?


Did I say I was a fan of Suadi Arabia's tyrannical and oppressive gov? No, so quit projecting your nonsense onto me...thanks in advance.



posted on Nov, 3 2017 @ 01:28 PM
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a reply to: Middleoftheroad

I wasn't trying to be rude. I was just making a point.

Oil has been subsidized and in many ways still is. The ramifications of that are far more negative than if we relied on domestic electricity.



posted on Nov, 3 2017 @ 01:32 PM
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a reply to: seasonal

People tend to not buy stock in companies that don't make a profit.
Couple that with already low sales and your stock is bound to fall.

On a side note.
Indiana added a $150 tax on electric cars this past July too. These cars don't pay their fair share of road taxes normally gathered at the gas station.



posted on Nov, 3 2017 @ 01:37 PM
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I am huge fan of Tesla and electric cars, but the Feds have got to get out of the business of subsidizing businesses. I don't care if it is tax credits electric cars, solar power, or direct farm subsidies.

On the face of it is already absurd to think people won't buy a $100,000 car because they can't get a $7,500 tax credit. If Tesla needs to raise prices then so be it.

We keep creating a slippery slope trying to interfere in markets and provide incentives. Today it is electric cars, tomorrow it will be some other industry or "good cause" and then the next thing you know we have a 70,000 tax code...

Tax payers have had enough.



posted on Nov, 3 2017 @ 01:42 PM
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originally posted by: CriticalStinker
a reply to: Middleoftheroad

I wasn't trying to be rude. I was just making a point.

Oil has been subsidized and in many ways still is. The ramifications of that are far more negative than if we relied on domestic electricity.


Oh ok, yea I agree just they weren't the topic. Sorry for my snarky response. I thought you were trying to portray something onto me that isn't true. My point is any business that can't make a profit without government assistance shouldn't be in business.



posted on Nov, 3 2017 @ 01:46 PM
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I like that this tax credit is ending. I also wish that the subsidy for corn was gone too. Both of these are counterproductive. Realize that until solar energy becomes common place and sufficient for energy demands; using electric still requires the burning of fossil fuel. The energy in our houses and workplaces comes mainly from burning oil and there is still some coal burning electric plants. Thus, buying electric cars does not help our dependence on oil nor help the environment. It would be better to pursue the development of hybrid cars at this time. Using surplus energy generated by small efficient fossil fuel burning engines would be more efficient and economical.

Likewise, I would like to stop the corn subsidies and the addition of ethanol to gasoline. There is no need for such maneuvers and actually uses more fossil fuel. To produce the ethanol used as a gasoline additive you must look at the energy required. Fertilizers and tractors use fossil fuel to produce the corn crop. These cost are not being properly represented when look at the benefits of adding ethanol to gasoline. Also, ethanol degrades rubber, thus being harder on rings and other rubber based components.



posted on Nov, 3 2017 @ 01:50 PM
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As of this moment, their stock is up $5

TSLA




posted on Nov, 3 2017 @ 01:53 PM
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a reply to: seasonal

Thanks for this; somehow I missed it.

As I read the story from the source, it appears to me, (could be wrong), that this repeal is part of, i.e., written into, the Republican's House version of their proposed tax bill?

If I were a person interested in investing in Tesla stock, I'd wait....hope it drops even more as passage of a bill looms larger, buy a small lot, say 50 to 100 shares, buy an out of the money put, to cover potential crash, and hold on. My bet is on the idea that this Congress, come January 1, 2018, will have passed NO tax reform bill. The way I see this bill going is that they House will push a bill up to the Senate; the Senate will savage it and with multiple changes, refer it back to the House; then the House will try to come up with a compromise, pass it back to the Senate and then Senate support for the bill and the process will fall to pieces just like the Repeal Obamacare effort failed.

After 2018, this Congress will do nothing except to campaign for re-election.

PLEASE HEED THIS WARNING!

If you're in the stock market, BEWARE the fact that assuming Congress CAN'T pass a tax bill, this market is going to do a 15% correction to the downside!

I'm looking for the first signs of a recession in the US economy and I may have seen one of those first signs......Sears/K-Mart have closed 350 stores this year and plans to close 65 more. Next step? Collapsing of housing prices in the Northeast Corridor.

Thanks
Tony



posted on Nov, 3 2017 @ 02:00 PM
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originally posted by: feldercarb
I like that this tax credit is ending. I also wish that the subsidy for corn was gone too. Both of these are counterproductive. Realize that until solar energy becomes common place and sufficient for energy demands; using electric still requires the burning of fossil fuel. The energy in our houses and workplaces comes mainly from burning oil and there is still some coal burning electric plants. Thus, buying electric cars does not help our dependence on oil nor help the environment. It would be better to pursue the development of hybrid cars at this time. Using surplus energy generated by small efficient fossil fuel burning engines would be more efficient and economical.

Likewise, I would like to stop the corn subsidies and the addition of ethanol to gasoline. There is no need for such maneuvers and actually uses more fossil fuel. To produce the ethanol used as a gasoline additive you must look at the energy required. Fertilizers and tractors use fossil fuel to produce the corn crop. These cost are not being properly represented when look at the benefits of adding ethanol to gasoline. Also, ethanol degrades rubber, thus being harder on rings and other rubber based components.


I feel very, very sorry for you. You're a "Pragmatist". Rather than hew to a "Party" line, you analyze things from many different angles in an attempt to find the best performing, most efficient solution to particular problems.

Sadly, this means you're a Dinosaur. The butt heads in charge don't try to solve problems, they only try to get maximize their power and wealth. And by the ones in charge I mean Congress and the Deep State.

Sound, practical, efficient solutions are of no interest to them; hell, they won't even take a proposed solution and test drive it to see how well it functions.

Your interests might best be served by immigrating to Germany, or perhaps Sweden. I hear those societies value efficiency over greed.



posted on Nov, 3 2017 @ 02:02 PM
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a reply to: TonyS

Thanks for the comment. I appreciate your candor on the subject. I always see things differently than most others.



posted on Nov, 3 2017 @ 02:04 PM
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Cutting the subsidies will save us like $50 billion, and that's a drop in the bucket to getting us out of the red. Cut more!

For Tesla, people should know what they are getting into when they buy their stock. I don't think Tesla is going anywhere, and this "crash" will be recovered by the end of the year.

For electric cars, I do worry that the industry is DOA in its current form. There doesn't seem to be enough minerals to meet a global demand: jalopnik.com...



posted on Nov, 3 2017 @ 02:20 PM
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a reply to: Bluntone22

I can’t say what a ‘fair share’ (e.g. how do we account for $.51/gallon federal subsidy for corn ethanol; requirement for low-sulphur diesel [the whole VW/Audi debacle with diesel emissions]; etc.) is when paying taxes for usage of government maintained roads, but Oregon has completed (or close to) a pilot program using miles driven to determine a more efficient taxing mechanism.

From an efficiency point-of-view, taxing consumers based on miles driven produces a better outcome than the standard gas tax. The gas tax worked pretty well when fuel-economy standards were a ‘new thing’ and fuel consumption was a much larger share of individuals’ disposable income, but those days were long ago and many states’ Dept of Transportation’s coffers are being strained.

If I have some time to really dig in, I’ll see (and add relevant links) what Oregon’s pilot program was able produce, as it relates to usage vs consumption mechanisms.



posted on Nov, 3 2017 @ 02:41 PM
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originally posted by: BeefNoMeat
a reply to: Bluntone22

I can’t say what a ‘fair share’ (e.g. how do we account for $.51/gallon federal subsidy for corn ethanol; requirement for low-sulphur diesel [the whole VW/Audi debacle with diesel emissions]; etc.) is when paying taxes for usage of government maintained roads, but Oregon has completed (or close to) a pilot program using miles driven to determine a more efficient taxing mechanism.

From an efficiency point-of-view, taxing consumers based on miles driven produces a better outcome than the standard gas tax. The gas tax worked pretty well when fuel-economy standards were a ‘new thing’ and fuel consumption was a much larger share of individuals’ disposable income, but those days were long ago and many states’ Dept of Transportation’s coffers are being strained.

If I have some time to really dig in, I’ll see (and add relevant links) what Oregon’s pilot program was able produce, as it relates to usage vs consumption mechanisms.


I am sorry, but as a construction worker and someone who lives in the country, I have to disagree with your better idea of taxing mileage. All this will do is encourage people to move to the city and be more herded in populated areas. I and so many working individuals drive a lot to build your cities and infrastructure, why should we be penalised more for working hard and constructing this nation?

Depending on the gas tax pretty much alone for so long is the problem. Everyone city folk along with country folk depend on the highway system. Cities would not get restocked with the goods that they need to survive without the trucks that haul the goods on the highway system.

Personally I believe that the tax system needs to be reworked to where everybody pays a fair share for the roadway system.

I don't have the answer but I don't think hurting working people more than other people will solve the problem in the long run.



posted on Nov, 3 2017 @ 02:52 PM
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originally posted by: JIMC5499
a reply to: amazing

I've always had a problem with the term "giving a tax break". It isn't the Government's money in the first place so it doesn't "give" anything.


Yeah, I hear you. I'm just saying that either do it for all businesses or none of them.



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