Contrary to what happened in Mexico, Tesla received subsidies in China and the United States to install electric car plants, according to information from the company itself.
Tesla has an agreement with the Shanghai local government for land use rights at Gigafactory Shanghai. Under the terms of the agreement, the company is required to meet a cumulative capital expenditure target and an annual tax revenue target beginning in 2023.
In addition, the Shanghai government has granted its subsidiary Gigafactory Shanghai certain incentives to be used in connection with eligible equity investments in Gigafactory Shanghai. For the years ending December 31, 2022 and 2021, the company received a grant of $76 million and $6 million, respectively.
In connection with the construction of Gigafactory Nevada, Tesla entered into agreements with the State of Nevada and Storey County, Nevada, providing specific tax reductions, discounts to base rate energy rates, and transferable tax credits of up to $195 million. of dollars. For the construction of Gigafactory Texas, the company entered into a 20-year agreement with Travis County, Texas, whereby it would receive grant funds equal to 70-80% of the property taxes it pays to Travis County. .
Internationally, Tesla has manufacturing facilities in China (Gigafactory Shanghai) and Germany (Gigafactory Berlin-Brandenburg), allowing it to increase the affordability of its vehicles for customers in local markets by reducing transportation and manufacturing costs and eliminate the impact of unfavorable rates.
In the United States, on August 16, 2022, the Inflation Reduction Act of 2022 (IRA) was signed into law and became effective for fiscal years beginning after December 31, 2022, while remaining subject to future guidance publications.
The IRA includes multiple incentives to promote clean energy, electric vehicles, the manufacture or purchase of batteries, and energy storage, including through the provision of tax credits to consumers.
For example, qualifying Tesla customers can receive up to $7,500 in federal tax credits for the purchase of qualified electric vehicles in the United States through 2032.
In early March, Elon Musk, CEO of Tesla, confirmed that his company will build its electric car “gigafactory” in Mexico. Days later, the president of Mexico, Andrés Manuel López Obrador, announced that he had refused to grant a 50% subsidy to Tesla for the installation of battery plants, thus eliminating the project. Tesla also won no subsidies for the new car plant, according to the federal government.
In 2022, Tesla increased its global vehicle production by 46%, producing more than 1.3 million units. The US Environmental Protection Agency (EPA) projects a cumulative fleet size of 5.7 million electric vehicles by 2025.
Other industry analyzes show higher fleet sizes. For example, S&P Global Mobility conservatively forecasts that the United States will have 7.8 million EVs on the road by 2025. For its part, McKinsey forecasts that the US EV fleet will grow to 15 million by 2025.
