Washington State legislators are looking to introduce a new tax that seems to target Elon Musk and Tesla specifically.
Per the Wall Street Journal, two new tax bills introduced by Washington Democrats seek to tax EV credits that Tesla would cash in on at 10% of the credit price. This is important, as Tesla has been stockpiling emission credits and can sell them to OEM automakers that cannot meet the electrification benchmarks set by the state.
Washington has set rules on electrification and mandates automakers to produce 20% of new vehicles as electric or plug-in hybrid vehicles. These percentages change over the years, with 2026 requiring 35%, 2028 requiring 51% and 2030 requiring 68%. If an automaker is not able to reach those thresholds, it can purchase credits from greener OEMS like Tesla or Rivian.
This new legislation would tax Tesla and other EV companies on these credit sales at a rate of 10%. According to the bill, the tax is intended to level the playing field after EV companies have received an unintended windfall from the EV credit policy within the state.
It remains unclear if this would be an effective policy, but Musk and Tesla could raise the price of their credits to offset the 10% tax, as OEMS will most likely still need the credits moving into 2026 and beyond.
Tesla and Musk have not commented on the proposed legislation yet.
