as predicted yesterday at the gigafactory Nevada Tesla unveiled a significant 3.6 billion dollar
investment the new 4680 battery cell plant which will be housed under the same roof as the future
Tesla semi-manufacturing facility as part of an expanded gigafactory Nevada complex will
be housed under the same roof as the Tesla semi-manufacturing facility Elon Musk said
during a presentation at the plant while Nevada Governor Joe Lombardo was present
gigafactory Nevadas Phase 2 expansion includes the two newly announced plants as Elon Musk noted
but what exactly did Joe Biden do that shock Tech billionaire Elon Musk hello everyone welcome back
to Elon Musk Evolution where we bring you the most recent news about Elon Musk and his multi-billion
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when it comes to the Biden administration's Advanced manufacturing production credits
Tesla has stated that it will benefit greatly as it strives to produce 1000 gigawatt hours
of EV batteries annually the credits which are a crucial component of the inflation reduction act
under the Biden Administration are intended to promote the production of specific energy
components within the country such as solar wind and qualifying batteries the credit is
35 dollars per kilowatt hour for businesses that produce battery cells the location of the material
sourcing is subject to restrictions nevertheless minerals for batteries for instance must come from
Nations like Australia with which the US has free trade agreements during the company's Q4
earnings call on Thursday Australia time musk was asked how much Tesla anticipates making from the
credits in the upcoming year musk responded as follows long term we expect the value of
these credits to be very significant you can do the math if we were to get anywhere near 1
000 gigawatt hours of production or even a few hundred gigawatt hours is very significant
currently Panasonic manufactures the majority of Tesla's batteries in the U.S Tesla's in-house
battery output will be much higher in 2024 as a result of scaling up manufacture of its own 4680
cells this year in the case of Panasonic with its domestic manufacturing we're splitting the value
of the credit so the value of the credits this year will not be gigantic but I think it could
be gigantic and we think it probably will be very significant in the future Zach kirkhorn the CFO
of Tesla continued we think on the order of 150 to 250 million dollars per quarter this year and
growing over the course of the year so far as our volumes grow by doing the math the credits would
be worth 2.1 billion dollars if Tesla produced 60 kilowatt hour battery packs for 1 million vehicles
in the U.S despite the fact that the Shanghai Factory in China presently produces the majority
of Tesla's Vehicles the company plans to build 1.8 million cars this year globally so it's possible
that the credits will soon be bringing in billions of dollars a year the day before the earnings call
Tesla revealed a 3.5 billion dollar investment into its Nevada Factory to expand manufacturing of
4680 batteries and to set up lines for the Tesla semi-vehicle Tesla claimed that the expansion will
increase the Nevada Factory's annual capacity for producing batteries to 100 gigawatt hours
but that this would eventually increase to 500 gigawatt hours the credits would be extremely
valuable amounting to an astounding 17.5 billion dollars a year assuming a production rate of 500
gigawatt hours if and when Tesla reaches such a level it's unclear if the credits will still
be available musk claim that the amount of battery storage now being produced is only a
small portion of what is required for stationary storage and electric vehicles during Tesla's Q3
earnings call in October in order to accommodate the switch to electric vehicles and renewable
energy sources the world will need a total of 400 terawatt hours of batteries according to
musk who stated that Tesla's goal was to produce 1 000 gigawatt hours of battery storage annually
tax credits for electric vehicles are coming how will they work a tax credit of up to 7 500. will
be available to many Americans starting in January for purchasing electric vehicles the credit which
is a result of modifications made by the inflation reduction Act is intended to increase EV sales and
lower greenhouse gas emissions but it's unclear whether anyone will be able to take advantage
of the entire 7 500 credit next year due to a complicated web of rules including where
batteries and vehicles must be produced but for at least the first two months of 2023 a delay
in Treasury Department regulations for the new benefit is anticipated to make the whole credit
momentarily accessible to Consumers who meet specific income and price thresholds for those
who purchase old EVS the new law also offers a modest credit it's possible that certain EV brands
that were qualified for a separate tax credit that started in 2010 and will expire this year
won't be accepted for the new credit because they are produced outside of North America a number of
EV cars built by KIA Hyundai and Audi for instance won't qualify at all more individuals will be able
to buy zero emission automobiles thanks to the new tax credit which is valid until 2032. look
at it more closely here what has changed for 2023 for those who purchase select new electric
vehicles some plug-in gas electric hybrids and hydrogen fuel cell Vehicles a credit of
up to 7 500 will be made available a four thousand dollar credit will be made available to buyers of
second-hand battery-powered Vehicles however the naughty subject of which vehicles and purchasers
will be eligible for the credits will not be clarified until the treasury releases the proposed
regulations in March as of now it is known that new EVS must be produced in North America in
order to be eligible for the credit additionally restrictions on vehicle prices and buyer salaries
are meant to exclude wealthier buyers complex regulations will also apply to battery component
parts as of March the majority of battery minerals will need to originate in North
America be recycled there or come from a nation with a U.S free trade agreement that percentage
will eventually rise to 80 percent moreover starting at 50 percent All Battery components
must be produced or manufactured in North America eventually this percentage will reach 100 percent
batteries cannot contain minerals that originate from foreign entities of concern primarily China
and Russia after 2025. since many EV metals and parts are now obtained from China the ban on
battery Parts in those Nations will take effect in 2024. this will present a challenge for the Auto
industry there are specifications for battery size as well which automobiles are eligible
that's not totally clear because there are so many unanswered questions the largest ev manufacturers
in North America are General Motors and Tesla the U.S is home to the manufacturing of each type of
battery however buyers of those Vehicles would probably initially only be eligible for half
the tax credit or 3 750 because of the rules for wear batteries minerals and parts must be created
the full credit will be accessible in 2025 according to GM although its qualifying EVS should
be qualified for the 3750 credit by March the standards pertaining to where minerals and parts
must be sourced will be relaxed until the treasury adopts its regulations this will make it possible
for qualified purchasers to get the entire 7 500 tax benefit for qualifying models early in 2023
the 2022 and 2023 model years according to the energy Department saw their production of 29 EV
and plug-in cars in North America they come from the following manufacturers Audi BMW Chevrolet
Chrysler Ford GMC Jeep Lincoln Lucid Nissan rivion Tesla Volvo Cadillac Mercedes and Volkswagen
not all of these vehicle types will however be eligible for credits due to price Caps or battery
size constraints how about the cost new electric sedans have a maximum suggested retail price of 55
000 to be eligible pickup trucks SUVs and vans cannot cost more than eighty thousand dollars
each due to this two more expensive Tesla cars will be disqualified models three and
why two of Tesla's best-selling models will be eligible although their price may go over the
cap with options although less expensive models are on the way according to Kelly Blue Book the
average electric vehicle costs over sixty five thousand dollars now can I get credit for this
your income will determine this buyers of brand new EVS aren't allowed to have an adjusted gross
income of more than one hundred fifty thousand dollars if they're single three hundred thousand
dollars if they're married and two hundred twenty five thousand dollars if they're the head of the
household the maximum annual income for used DV buyers is seventy five thousand dollars
for singles one hundred fifty thousand for joint filers and 112 500 per head of household
how will you repay the credit when you file your 2024 tax return it will initially be
applied to your 2023 tax return beginning in 2024 customers will be able to transfer their credit to
a dealership to lower the vehicle's sticker price can the credits increase EV sales in
fact Mike Fiske associate director for s p Global Mobility thinks it will probably take a few years
because the treasury took its time releasing the tighter rules the credit may result in an increase
in sales at the beginning of next year however because of shortages of Parts notably computer
chips the majority of automakers are currently selling all the EVS they produce and are unable to
produce any more furthermore it may be difficult for automakers to authenticate the sources of
the battery materials and components which is necessary for purchasers to be given the full
credit more EV Supply chains are being shifted to the US by automakers in a desperate effort how
does the credit for used DBS work for purchasing EVS that are at least two years old consumers are
eligible for tax credits of up to four thousand dollars or thirty percent of the vehicle's price
whichever is less however the used DV must be less expensive than twenty five thousand dollars this
is a challenging requirement given the beginning prices of the majority of EVS now on the market
but used DVS are not required to be produced in North America or adhere to the rules on battery
sourcing in 2026 to 2032 or a few years in the future as automakers ramp up and volumes rise
Chris harto a senior policy analyst for Consumer Reports Magazine said the real effects were these
tax credits will have a huge influence will occur for what purpose is the government providing the
credits the credits are a component of the roughly 370 billion dollars in clean energy spending that
was signed into law in August by President Joe Biden and represent America's largest investment
in the battle against climate change EV sales in the U.S currently account for around five percent
of all new car sales but Vice President Biden wants that number to reach 50 by 2030. sales of
EVS have been increasing especially as States like California and others have taken steps to
phase out gas-powered Vehicles could eligibility requirements be lowered to allow for more EVS
that is still unclear EVS built in Europe or South Korea are ineligible due to North
American manufacturing standards which has angered some U.S allies the new EVN battery
plants they intend to construct in Georgia won't start operating until 2025. European Union Nations
worry that the tax credits would force their automakers to relocate their factories to the
U.S the sourcing of batteries and the necessary mineral requirements will be disclosed according
to the treasury Department by Year's End more EVS would be qualified if the regulations were
loosened to accommodate the worries of U.S allies however it runs the risk of increasing
American dependency on foreign Supply networks and that ends today's episode what do you think
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