The Reason Why Tesla Pays So Little in Taxes Will Infuriate Sen. Warren
A key reason Tesla pays so little in income taxes is that the “company benefits from green energy tax breaks passed by Democrats.”
Sen. Elizabeth Warren (D-MA) has long feuded with Elon Musk. Still, her resentment over his billionaire status escalated into open warfare once operations began at the Department of Government Efficiency.
JUST IN: A screeching Elizabeth "Pocahontas" Warren says Elon Musk is "seizing power from the American people" by not allowing congress members to waste taxpayer money.
I knew Trump's 2nd presidency would be good but didn't realize it would be this good.
Warren launched new… pic.twitter.com/5gbJWhh1gb
— Collin Rugg (@CollinRugg) February 4, 2025
Warren’s chief complaint is that no one elected him, though she frequently criticizes him for not paying his fair share of taxes.
Senator Elizabeth Warren is asked what she’d like to say to Elon Musk and DOGE;
“Get the hell out of our government. Nobody elected you.”
— Art Candee
(@ArtCandee) March 5, 2025
On March 5, Warren, a member of the Senate Finance Committee, sent nearly identical form letters to the CEOs of Tesla, Amazon, Meta, Apple, and Alphabet. Aside from inserting company-specific figures, the letters were essentially the same. I will use Warren’s letter to Elon Musk as an example. She began:
I write to you today with deep concern about your personal and financial ties to the Trump administration and how you may be exploiting this relationship to slash at least $2.5 billion from Tesla’s tax bill while leaving working families to pick up the tab.
Referring to a February analysis conducted by the left-leaning Institute on Taxation and Economic Policy, she stated that “Tesla paid no federal income tax last year and just $48 million over the last three years on $10.8 billion in U.S. profits.”
Warren continued, “American taxpayers will shoulder the burden of tax cuts for Tesla, and they deserve answers about your efforts to secure massive tax breaks for billionaire corporations.”
She asked that Musk respond to a list of questions by March 19, 2025.
It’s unclear if Musk has replied to Warren’s request.
In any case, The Wall Street Journal editorial board has provided the answer—and Warren won’t like it. Contrary to her claim that Musk is exploiting his ties to the Trump administration, a key reason Tesla pays so little in income taxes is that the “company benefits from green energy tax breaks passed by Democrats.”
According to the Journal:
Most of Tesla’s $7.1 billion in net income last year doesn’t even derive from selling electric vehicles, solar panels or battery storage. Some $2.8 billion came from the sale of regulatory credits to other auto makers that need to comply with government EV mandates. As EV mandates have increased, so have Tesla’s profits from such credit sales.
Tesla made another $1.6 billion in interest income on cash and short-term investment holdings. Democrats can thank the Biden inflation for allowing companies to earn higher interest on their cash holdings. In addition, Tesla recorded nearly $600 million in book income from price appreciation in its bitcoin holdings, but this is akin to an unrealized capital gain.
The editors explain that Tesla pays little to no taxes primarily because it operated at a loss every year from its founding in 2003 until 2020. Businesses are allowed to carry forward net operating losses to reduce future tax obligations, a policy designed to encourage entrepreneurship, as many companies take years to become profitable. This deduction also helps stabilize income fluctuations from year to year.
Specifically:
Tesla recorded $625 million from tax credits for its electric vehicles and $756 million for its solar and energy storage business last year, mostly from manufacturing batteries in the U.S. These tax credits can also be carried forward to offset future tax liabilities. Tesla had $1 billion in renewable energy tax credits on its books at the end of last year.
As much as Warren bristles at the thought of Elon Musk, Tesla’s low tax bill is largely the result of her party’s push for Americans to transition to electric vehicles—along with the fact that Tesla, as a relatively young company, only became profitable in 2020.
Elizabeth writes commentary for The Washington Examiner. She is an academy fellow at The Heritage Foundation and a member of the Editorial Board at The Sixteenth Council, a London think tank. Please follow Elizabeth on X or LinkedIn.
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Comments
Everyone already knew that, right?
It also sold a lot of units on the tax credits to the buyers.
Considering that Tesla’s are mostly second or third cars that are purchased as a toy like a Porsha, Corvette, or other sports car it is silly that there were ever tax credits to buy them.
Most Teslas are upper middle class peoples’ commuter cars. I work in tech and there are literally hundreds of them at my office. Most of these people aren’t car people but they like techy things. Tesla is a tech company that happens to make transportation appliances. The Roadster was a toy but it was moderately sporty. The S3XYC have little going for them in the fun department besides 0-60.
I just moved to Tucson, Arizona. There is an absolute boatload of the things here. Frankly, for the type of driving that I’m now doing, a Tesla would be a nice car to have. Where the issue comes in as I want to take the occasional run up to Palm Springs or Cat City to visit friends. In that case, I really don’t want to stop in charge halfway.
And, yes, the 0 to 60 times or a blast.
Grizz! Let’s do almozar!!
If I didn’t live in a rural area, I’d consider an EV. Other than range and weather, a big problem for me would be charging. My home is 100% solar. I’d have to put in a new system or expand my current system just for the car. I’m really not interested in doing that.
Q: Why does Tesla pay so little in income taxes?
A: It only seems like a little to an out of touch Indian who hasn’t kept up with the Wampum exchange rate.
Wampum doesn’t got as far as it used to. The price of wig-wams, firewater, tomahawks and buckskin moccasins increased dramatically during the Biden years.
nobody elected the msm either but they are setting leftist policy
Pardon me, Fauxcahontas but your Communist is showing.
Angry Pocahontas is best Pocahontas.
Where was Fauxcahontas when Antia Dunn and Valerir Jerret were doing much worse. Musk plays by the rules you set.
DID YOU KNOW — There are only 2 elected members of the Executive Branch. (Extra credit for Ds if you can name them both.)
first lady and first son???
heh heh
Between Trumps first and second term there were no elected members in the executive branch.
I only have one thing to say:
BAHAHAHAHAHAHAHAHA
Hahaha. Stupid fool. Everytime the democrats make a change favorable to their party the Republicans take advantage of it and the democrats are surprised. Alinsky rules.
Congress: passes tax code.
Wealthy people: use tax code to minimize their tax burden as is the right of every American.
Congress: “rich people aren’t paying their fair share”
Wealthy people: “I pay every penny I’m required to or else the IRS will throw me in jail. I pay more each year than you’ll earn in your lifetime.”
Yeah.
Remember “Trump isn’t paying his taxes, we demand to see his returns!!”?
Thud.
Important lesson in micro economics – Supply and demand curve. Tax credits artifically shift the demand curve so that all most all of the buyers tax credit winds up in the sellers pocket via a higher sales price.
Micro economics 101!
And if you dig down into it I guarantee that the Democrats are the one that put these ‘regulatory credits’ and tax breaks into place, back when they were trying to demand ALL ELECTRIC CARS BY 2035!!!!
They just hate the fact that Elon is the only one that has been able to make it work.
A couple of years ago Musk personally paid $11 billion in federal income tax, based on stock sales.
Just like Warren Buffet he tries to minimize his tax bill.
I want to know what my senator is doing harassing private businesses. No one elected her to do that. She should be looking into the rash of people falsifying their resumes.
It’s a Ross up who I hate more. This evil hypocritical lying woman or John Francois Kerry, gigalo.
How did Karen not be Elizabeth? It’s closer to reality.
No one elected Richard Cordray either, and yet she fought tooth and nail to have him appointed and to prevent the president from firing him.
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