The latest example of this is being largely passed over by the media.
During the 2012 presidential debates, Mitt Romney landed some solid punches against Barack Obama, even though he ultimately couldn’t reel in the presidency. While many have focused on how he’s been vindicated on topics like his warning about Russia, he also got it right when it came to the Obama Administration’s picking of winners and losers. For a long time, supporters of the 44th President of the United States tried hard to ignore the abject failure of Fisker and Solyndra, choosing instead to celebrate Tesla’s success. Many enthusiastically purchased a Model S or Model X and revered Elon Musk. In case you haven’t noticed, leaders in Washington, D.C. have done a sudden about-face on Musk and Tesla fairly recently.
See a Polaris RZR driver try ditching the cops by going through the woods here.
The most recent example of this souring attitude comes via the $430 billion drugs and climate change bill Joe Manchin has agreed to after months of wrangling with Chuck Schumer. While spending our way out of inflation is absolute insanity, what really caught my eye was the electric vehicle tax credit.
Obama really pushed for people to get a kickback from taxpayer coffers because they bought an EV after the taxpayer was also forced to provide sweet loans to EV startups. Many complained and rightly pointed out the policy benefited the wealthy since they were the ones buying Teslas in force as their fifth or sixth vehicle.
This new bill seeks to somewhat short circuit that type of criticism. While it lifts the 200,000 unit cap on the $7,500 EV purchase tax credit, families earning over $300,000 wouldn’t qualify. To those in D.C. anyone making $250,000 must not be rich even though most Americans would see it otherwise. But that’s not where Tesla gets slapped in the face.
As it’s written, the bill reportedly encourages consumers to purchase electric trucks and SUVs instead of sedans. Any electric car priced over $55,000 wouldn’t qualify. Sure, you can buy a Model 3 for as little as $46,990 but most people want at least the Long Range version, which starts at $57,990 if not the Performance at $62,990. Add on some options and you’re likely to exceed the purchase price cap for the tax credit.
Consider this: the 2023 Chevy Bolt has a starting MSRP of $27,200. The Nissan Leaf starts at $27,800. The Hyundai Kona Electric starts at $34,000. Those prices are significantly lower than the cheapest Tesla. While one could argue GM and others are just running a better pricing mix, the $55,000 price cap seems intentionally aimed at just one automaker without being so glaringly obvious.
Sure, electric trucks priced up to $80,000 are also included. But let’s face it, the Cybertruck likely won’t be a volume seller for Tesla. That’s especially true compared to the new Ford Lightning and Chevy Silverado EV. And so with the stroke of a pen, Congress provides a boost to Tesla’s competition. The legacy of picking winners and losers carries on, only this time it’s a little more subtle.
What wasn’t subtle was when President Biden held an electric vehicle summit and didn’t invite Tesla. The reason was obvious: unlike Ford and GM, Tesla doesn’t have a unionized workforce. Biden and others in his cabinet have many times praised that very fact, making it clear that once again they are choosing favorites. Tesla, this time around, isn’t being tapped as a winner. Time will tell if this is a severe miscalculation by politicians in D.C. Recent history has taught us they’re not as good at selecting optimal companies as consumers, so we might see yet more government-backed failures coming down the pipe almost as if centralized economic control is overall doomed to fail.
