Tesla has publicly urged the U.S. Senate to reconsider legislation that threatens to severely impact the company’s fast-growing energy division—a sector increasingly crucial as electric vehicle sales face declining demand. Last week, House Republicans passed a reconciliation bill designed to reverse significant portions of the Inflation Reduction Act, including essential tax incentives for solar energy and other renewable projects.
If approved by the Senate in its current form, the bill would at once remove credits that homeowners currently rely on, which provide a 30% tax deduction for residential solar installations. The clean-energy industry credits, used equally by commercial developers, would also face an abrupt curtailment, shifting their expiration date forward by four years and requiring all supported projects to commence within just 60 days following the bill’s enactment.
Tesla Energy is now spearheading public resistance to the measure, arguing openly on social media platforms that abruptly eliminating these tax incentives threatens U.S. energy independence and grid reliability. On its official X account, the company called upon Senate Republicans to adopt a measured transition. Specifically, Tesla proposes a gradual winding-down of Sections 25D and 48e, ensuring continued investment in solar and related technologies.
The stakes are significant for Tesla, whose energy division revenues soared 67% in the first quarter of this year alone, climbing to $2.7 billion. Tesla claims the proposed changes risk derailing the rapid deployment of renewable generation that supports broader goals, including those tied to powering artificial intelligence infrastructure and bolstering domestic manufacturing.
This legislative threat arrives at an already challenging moment for renewable energy stocks. Since House Republican leaders prioritized repealing portions of the Inflation Reduction Act, solar companies have seen sharp declines in market value. Industry leaders Enphase, SunRun, and First Solar have experienced losses of 45%, 25%, and 15% respectively in share prices this year alone.
These policy changes risk wider implications beyond Tesla. Last year, clean energy accounted for 93% of new capacity added to the U.S. power grid. In the first quarter of 2025, renewables added an additional 7.4 gigawatts—marking the second-highest first-quarter performance on record.
Tesla has historically relied on government incentives and regulationsto bolster its operations—from early Department of Energy loan guarantees to the substantial profits generated through selling regulatory credits earned from car emissions standards. With CEO Elon Musk signaling he intends to step away from direct engagement with politics, Tesla itself has assumed a more proactive role, pursuing direct appeals to lawmakers and the public in defense of these critical energy policies.
