US government reveals its spending on EV tax credit subsidies putting more Teslas on the road

The U.S. Department of the Treasury has finally put a number on the electric vehicle subsidies it has doled out since the beginning of this year.

Earlier calculations pegged the government's expenditures in the form of EV tax credits to be about $200 million a month, and they weren't far from the truth.

Under the White House administration's Inflation Reduction Act, the American consumer has gotten no less than $2 billion in electric car purchase subsidies. Or, as the Treasury Department puts it, "upfront savings," since the tax credit is now deducted from the retail price directly by the dealer.

According to the Treasury's Janet Yellen, the "Biden-Harris Administration’s Inflation Reduction Act is lowering upfront costs for electric and plug-in hybrid vehicles, saving Americans more than $2 billion since January."

These savings have been realized on 250,000 new clean vehicles which get $7,500 in federal tax credits apiece, and 50,000 used cars that get a $4,000 subsidy.

Elon Musk recently went on record claiming that Tesla doesn't need those tax credits to sell more cars, but it just deprecated its cheapest Model 3 precisely because it didn't qualify.

Moreover, its bestselling Model Y SUV wouldn't have moved nearly as many units if it wasn't for the government's $7,500 largesse that brings its price down to gas-powered car levels.

The federal EV tax credit is scheduled to run until 2032, and it remains to be seen how many billions in total will the Treasury spend on the program, given the smorgasbord of electric car models and battery factories on US soil that are expected to qualify for government subsidies in the next few years.

Tesla is going to be the largest beneficiary of the program. Between its electric cars, 4680 batteries, Supercharger network and energy storage businesses, it is expected to earn no less than $41 billion from the government for the duration of the subsidy program.

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