Tesla asks Senate to Protect its growing Energy Business
Tesla’s success is partly rooted in government support, including a 2009 Department of Energy loan guarantee and the sale of regulatory credits to other carmakers, which have accounted for a third of its $32 billion in profits since 2012.
Now, the company’s energy division — one of the few strong performers as EV demand declines — is facing serious threats.
House Republicans approved a reconciliation bill last week that would roll back key parts of the Inflation Reduction Act, including tax credits for home solar systems and clean energy initiatives. The bill is now under Senate consideration.
Potential Impact on Tesla’s Energy Division if Senate Approves Repeals Unchanged
If the Senate passes the bill with those repeals unchanged, it could severely harm Tesla’s energy division, which generated $2.7 billion in revenue in the first quarter — a 67% year-over-year increase.
With CEO Elon Musk stating his involvement in government is over, Tesla has turned to lobbying lawmakers on X. Tesla Energy used the platform to appeal to Senate Republicans, warning:
“Suddenly ending energy tax credits would jeopardize America’s energy independence and grid stability. We urge the Senate to support a reasonable phase-out of 25D and 48E,” the company posted. “This will help maintain the rapid deployment of over 60 GW of capacity annually, crucial for AI and domestic manufacturing growth.”
Currently, homeowners can claim a 30% tax credit for new solar systems, and clean energy developers generally qualify for the same. These credits are set to expire at the end of 2032, but House Republicans are pushing to end them four years early and to require projects to break ground within 60 days of the bill’s enactment.
Tesla Warns of Risks to AI Growth and Domestic Manufacturing from Key Provision Eliminations
Tesla warned that eliminating key provisions of the law could jeopardize the annual rollout of 60 gigawatts of capacity needed to support AI growth and domestic manufacturing.
The Trump administration has emphasized “energy dominance” as a priority, but slowing clean energy deployment could undermine that goal.
In 2024, clean energy—mainly solar and grid-scale storage—accounted for 93% of new U.S. generating capacity. In Q1 alone, renewables added 7.4 gigawatts, marking the second-strongest first quarter on record. While natural gas projects face years-long delays, solar farms typically take just 18 months to complete.
Tesla’s energy arm, like many residential solar installers, relies heavily on tax incentives. With Republicans pushing to roll back the Inflation Reduction Act, U.S. solar stocks have suffered: Enphase is down 45% this year, Sunrun has dropped 25%, and First Solar has fallen 15%.
Read the original article on: Techcrunch
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