It’s no secret that car dealers in America haven’t exactly been amped about the shift toward electric vehicles.
While many dealers have leaned into the EV revolution, many more have resisted installing chargers, dissuaded customers from going electric and haven’t rushed into the education needed to sell these cars properly.
Even so, losing the EV tax credits could hurt their bottom lines, too. So now, more than a dozen car dealers are now pushing back, urging lawmakers in Washington D.C. to consider how the Senate’s proposed spending bill could hurt EV affordability and stall progress.
Welcome to the Friday edition of Critical Materials, your daily round-up of news and events shaping up the world of clean transportation and technology. Also on our radar today: A high-ranking Tesla executive has left the company amidst falling sales and brand turmoil. Plus, Rivian has laid off more than 100 employees from its manufacturing teams ahead of the R2 launch.
30%: Carmax, Carvana Urge Senate To Preserve EV Tax Credits
The Trump administration is attempting to kneecap this EV transition by taking away the very tools that were facilitating this adoption and making EVs more affordable for a growing number of car buyers who actually really want them. The federal consumer credits (for new and used EVs) are under the axe in the Senate’s proposed spending bill and so are the manufacturing credits for EVs and batteries.
As Automotive News reported this week, as many as 18 major car dealer networks in the U.S., including Carmax and Carvana, have written an open letter to the Senate to preserve the Biden-era EV framework and the tax credits.
And if you’re a car dealer who already has invested in chargers, staff training and revamped marketing to sell electric vehicles alongside gas cars, those years of planning and investment are now at risk.
The letter has also been signed by eight other EV stakeholders such as battery health and data start-up Recurrent and the Electric Vehicle Association, among others. They want the Senate to preserve the following provisions:
- 25E: Credit for Previously-Owned Clean Vehicles.
- 30C: Alternative Fuel Vehicle Refueling Property Credit.
- 30D: Clean Vehicle Credit.
- 45W: Credit for Qualified Commercial Clean Vehicles.
- 45X: Advanced Manufacturing Production Tax Credit.
Here’s an excerpt from the letter:
For years, dealerships like ours have invested billions of dollars as small businesses to serve our communities, to improve EV education, and offer exceptional service.
We need a stable and consistent market for our dealerships to plan, invest, and grow. Recent attempts to abruptly roll back key EV-related Inflation Reduction Act tax credits pose a serious threat to our business continuity and the industry’s long-term investments based on previous market signals and American leadership. Collectively, changes on such a rapid timeline would introduce significant uncertainty and deter investment.
We urge the Senate to consider moderation on the pace of overhauling the critical tax credits that our customers are counting on for new and used electric vehicles and to deploy electric vehicle chargers.
The dealers supported one small aspect of the latest version of the Senate bill, which did not include the annual $250 registration fee for EVs and $100 for hybrids. They said that was the correct thing to do as the flat fee would have been “punitive” and “unfair.”
Here’s more from the letter:
A gradual sunset of the EV-related rebates, rather than an abrupt repeal, is essential to serve the interests of American consumers as well as car dealerships and the broader auto industry. A slow phase-out would ensure market stability. Sudden elimination will disrupt the used car market, a backbone of the American economy.
A multi-year transitional period would also provide the opportunity for Americans to continue adopting cleaner vehicles more affordably. Finally, many independent and family-owned dealerships are depending on the current incentive structure to remain competitive. An immediate repeal could disproportionately affect these businesses, reducing jobs and opportunities in communities nationwide.
The language here really underscores just how critical tax credits have been in offsetting the capital-intensive shift to EVs. But more importantly, it reveals that dealers are beginning to recognize what’s actually happening on the ground: The credits—especially for used EVs—are helping working- and middle-income American households get behind the wheel of an EV and reap the myriad benefits of that.
That fact cuts directly against the Republican narrative that EVs are shiny objects for wealthy people. Here’s proof that the reality is far more grounded than the rhetoric.
60%: Musk’s ‘Fixer’ Leaves Tesla
Omead Afshar, Tesla’s vice president of manufacturing and operations and reportedly Elon Musk’s “fixer” is no longer with the company. Due to conflicting news reports, it’s unclear if he quit or was fired by Musk.
But regardless, he was one of Tesla’s most senior—and one of the few remaining—high-profile executives. Afshar played a key role in getting Gigafactory Texas off the ground, and as The Wall Street Journal reported, served as Musk’s behind-the-scenes problem solver while the CEO was busy firing American government employees or dealing with his several other companies.
Afshar even slept on the factory floor and did “firefighting” when problems arose. He seems to have done plenty of heavy-lifting for Tesla, including approving every single invoice over $25,000 and even taking frequent trips to Shanghai when Tesla’s gigafactory in China was being readied.
The talent exodus at Tesla is worrying and seems to be getting only worse. High-profile departures are nothing new in the tech world, but what’s happening at Tesla feels more serious than routine attrition. Its sales are plunging across the world, profits are down and brand image is, well… not good. It has finally launched the long-overdue Robotaxi service, but the rollout certainly hasn’t been flawless.
90%: Rivian Slashes Manufacturing Jobs
Photo by: Rivian
Rivian has laid off about 140 employees, TechCrunch reported Thursday. The layoffs affected the automaker’s manufacturing teams the most and were initiated to eliminate “process inefficiencies.”
“We have made the difficult decision to reduce a small number of our salaried manufacturing employees as part of an ongoing effort to improve operational efficiency for R2,” Rivian told the outlet in an email.
The R2 is the automaker’s upcoming mid-size SUV to rival the Tesla Model Y and make Rivian accessible to a broader audience.
Its R1T electric truck and R1S SUV are considered luxury EVs that are expensive and out of reach for the masses, even though they do have a growing and loyal customer base of their own.
At an expected starting price of $45,000 before factoring in any tax credits, the R2 aims to change that and make Rivian a higher-volume automaker.
100%: Temporary Glitch Or Prolonged Slowdown?
Photo by: Nissan
If you’ve read so far, you’ve probably noticed that all three headlines are somewhat negative. But there are many reasons to still be hopeful. Affordable models are in the pipeline, the charging network is getting bigger and better and automakers are trying hard to make fancy batteries right here in the U.S.
So, what do you make of it all? Are we hitting a temporary speed bump, or is this the start of a longer detour? What are you hearing from automakers, dealers and drivers in your orbit? Leave your thoughts in the comments.
Have a tip? Contact the author: suvrat.kothari@insideevs.com
