Tesla: Koch wants to put kibosh on extending helping tax cut

Charles KochCBS Sunday Morning/Youtube

• Charles Koch, a billionaire mega-donor known for helping conservative policymakers, has been lobbying against a Tesla-friendly tax-cut extension, according to Bloomberg.
• Republican Sen. Dean Heller of Nevada proposed earlier this month to lift the current cap on electric vehicles eligible for tax credits but to phase out the credit for the entire industry in 2020.
• Tesla, whose Gigafactory is located in Nevada, has lobbied Congress to lift a cap on electric vehicles, according to Reuters .
• Tesla introduced a cheaper version of Model 3 sedan last week and said it expects the new model to drive sustainable demand.
• Watch Tesla trade live here.

The billionaire mega-donor Charles Koch, one of the two Koch brothers who are famous for helping conservative policymakers, has been lobbying against legislation that would benefit electric-car makers such as Tesla. 

“Subsidizing the wealthy with tax dollars is not only bad policy, it also increases our national deficit,” Koch lobbyist Philip Ellender wrote in a letter sent to senators dated on Wednesday, according to Bloomberg.

“I urge you to oppose the expansion of credits on plug-in electric vehicles (EV) through 2022.”

The credit-expansion bill was sponsored by Republican Sen. Dean Heller earlier this month. Under current law, only electric vehicles below a certain price are eligible for a $7,500 tax credit. Once a manufacturer hits 200,000 EVs sold, the tax credit phases starts to phase out the following quarter. Heller proposed to lift the current capital restriction on electric vehicles eligible for tax credits, but to phase out the credit for the entire industry in 2020, according to Reuters.

Heller’s bill would boost demand for electric vehicle batteries made in his state, where Tesla’s Gigafactory is located. Tesla said in July it had delivered 200,000 electric cars to US customers, which under the current law will reduce the tax credits by 50% for half a year and then cut those credits to $1,875 for another six months until it ends. Heller’s legislation would extend Tesla’s tax credits until 2020. Tesla has lobbied Congress to lift the cap on electric vehicles eligible for a $7,500 tax credit, according to Reuters.

The electric-car maker on Wednesday posted a surprise third-quarter profit — thanks to strong revenue generated by its Model 3 sedan. Tesla announced last week a lower-priced version of its Model 3 sedan starting at $45,000. The sedan would only cost about $35,000 in California after federal and state tax rebates, according to CEO Elon Musk.

Tesla was up 2% this year.

Check out the full Bloomberg report here.

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