Tesla's Semis Will Get a Big EV Tax Credit Discount

With the Inflation Reduction Act of 2022, Tesla's big rig business could be booming.
Written by Andrew Kidd
Reviewed by Kathleen Flear
Aug 18, 2022
Tax credits
are a huge benefit of going green with your personal vehicle—but what if you want to go bigger for your business?
It looks like electric trucks (think
Tesla
’s big rigs) could stand to benefit from up to $40,000 in incentives thanks to the Inflation Reduction Act of 2022.

Electric truck makers will benefit

According to
Electrek
, the federal EV tax credit reform detailed in the act will restore the incentive for Tesla and GM EVs, but it's not just consumer vehicle buyers that will benefit.
A portion of the bill details allowances for "commercial clean vehicles," which might apply to larger electric trucks like semi-trailer trucks. Clean commercial vehicles that weigh more than 14,000 could get up to $40,000 in incentives. To quote the text of the proposed bill:
"The amount determined under this subsection with respect to any qualified commercial clean vehicle shall not exceed— (A) in the case of a vehicle which has a gross vehicle weight rating of fewer than 14,000 pounds, $7,500, and (B) in the case of a vehicle not described in subparagraph (A), $40,000."

What does that mean?

It means manufacturers of large trucks like Daimler,
Nikola
, and Tesla could see huge benefits as their battery-powered big rigs hit the roads in the future as freight companies hoover up these vehicles at a significant discount.
Tesla's Semi, for example, starts at $150,000. With the incentive, it'd bring the price down to $110,000. Electrek notes that it would make the cost per mile more competitive compared with other diesel-powered commercial trucks.
While the incentive would drive demand, it's not that big of a deal in the case of Tesla's Semi. Much like many other hot electric vehicles, the Tesla Semi has a reservation backlog reaching thousands of units as companies rush to adopt the somewhat scarce rig.

Why is there a backlog?

We've gone over why electric vehicle manufacturing is hitting a snag as the rare minerals required to manufacture the batteries—lithium and cobalt—are difficult to acquire. 
Some companies, like GM, are cutting deals with mining companies to source rare elements like cobalt straight from the source, while others like Tesla are trying to bring battery production in-house to ease the pitfalls of a fickle global supply chain.
The primary issue for these electric trucks, similarly, is the availability of batteries. Electric trucks like the Tesla Semi require around five to ten times the number of battery cells than consumer electric vehicles like the
Tesla Model S
or the
F-150 Lightning
.

Some automakers think the incentives go too far

While this is great for electric big rigs, some automakers think the Inflation Reduction Act goes too far, saying that many current consumer EVs would no longer qualify for incentives because of their foreign-made part content.
The bill would require automakers to adhere to stricter sourcing requirements by adjusting their supply chains to include more domestically sourced components. 
The
Alliance for Automotive Innovation
's John Bozzella wrote in a blog post that the bill would disqualify 72 consumer EVs currently on the market from the incentive.
While the organization laments what it calls the impending inability of Joe Average to
afford
a new EV without the incentive, it doesn't mention how it would affect automakers' bottom lines when it comes to electric vehicle sales.
Sure, it would be a setback to the collective 40-50% electric vehicle sales volume goal, but if recent events and the state of the global supply chain are any indication, the status quo is unsustainable—especially if exploiting cheap labor is a key part of an automaker's business model.
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