Tesla stands to lose billions as 'Big Beautiful Bill' could drastically affect sales: 'The stakes for Tesla are absolutely immense'

A provision from the recently passed "Big Beautiful Bill" could have long-lasting repercussions for Tesla.

What's happening?

Earlier this month, Congress passed the "Big Beautiful Bill," a budget bill that includes several cuts to environmentally friendly programs, credits, and rebates.

Among those is the elimination of federal electric-vehicle credits, which, as Not a Tesla App noted, have become a key source of revenue for Tesla.

The elimination of these credits goes hand-in-hand with the elimination of federal requirements that a growing percentage of automakers' sales need to be EVs. Those that didn't sell enough EVs could either pay a hefty fine or purchase credits from automakers that sold more than the required share.

As the largest all-electric automaker, Tesla has received and sold, by far, the most of these credits. Just in the first quarter of this year, the company made nearly $600 million by selling such credits, and, without them, would have posted a loss of nearly $200 million.

Why is this important?

As Not a Tesla App put it, "the financial stakes for Tesla are absolutely immense" from the budget bill.

Not only does Tesla stand to lose billions annually from selling credits to automakers that aren't making many EVs, but the elimination of other credits and rebates could result in an overall drop in EV sales, which would also impact Tesla's bottom line.

A $7,500 tax credit for purchasing a new EV and a $4,000 credit for buying a used one will no longer be in effect at the end of September. Previously, those credits were set to last through 2032.

This has already been a difficult year for Tesla sales. For the first time in company history, it reported consecutive declines in vehicle deliveries. And the Model Y, which made history by becoming the first EV to be the world's top-selling car, has lost that title after nearly two years.

What can I do about this?

If you've considered buying an electric vehicle, now may be the best time to do so, before the tax credits go away.

Whether it's made by Tesla or another automaker, going electric has many benefits. Because they don't produce tailpipe pollution, EVs have a significantly lower carbon impact than gas-powered vehicles. And without paying for costly fill-ups at a gas station, the annual cost of EV ownership is lower than that of their gas-powered counterparts.

Would you be more likely to get an EV if it came with a free home charger? Definitely 👍 Depends what the car costs 💰 Depends how fast it charges 💨 Not really 👎 Click your choice to see results and speak your mind.

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