Tesla May Emerge a Winner in Nevada’s Toss-Up Senate Race

(Bloomberg) -- Nevada’s nail-biter of a Senate race could end up benefiting Tesla Inc. and other makers of electric vehicles.

Republican Senator Dean Heller, who is engaged in a re-election fight with Democratic challenger Jacky Rosen, is preparing legislation that would extend the $7,500 per vehicle federal tax credit that’s stoked demand for electric cars. Such a move could boost his popularity in his home state, where Tesla has its giant gigafactory making batteries for the company’s Model 3 sedan.

Tesla May Emerge a Winner in Nevada’s Toss-Up Senate Race

Heller said he’s still seeking support for the legislation, but analysts say Republican leaders would be smart to back it to help his re-election effort. Nevada is one of three states where Democrats have their best chance of taking a Republican seat, along with Arizona and Tennessee. The independent Cook Political Report rates the race as a toss-up.

The measures would remove an existing 200,000 vehicle per manufacturer cap on the credit, a move that would benefit Tesla, which reached that limit in July, according to Colin McKerracher, who manages coverage of the transport sector at Bloomberg New Energy Finance. General Motors Co., which is expected to reach the 200,000 vehicle cap by the end of this year would also be one of the main beneficiaries of such a bill, he said.

Elon Musk spoke out in defense of electric-vehicle subsidies during a podcast interview with comedian Joe Rogan Thursday, during which the Tesla chief executive officer also sipped whiskey and took one drag from what Rogan said was a joint containing tobacco mixed with marijuana.

“People tend to think, like, ‘Why should electric vehicles have a subsidy?’ But they’re not taking into account that all fossil fuel-burning vehicles fundamentally are subsidized by the environmental cost to Earth,” Musk said. “We are going to pay for it, obviously -- in the future, we’ll pay for it. It’s just not paid for now.”

Even if Heller is unable to get electric vehicle tax credit legislation passed before November, it could provide an issue for him to campaign on leading up to the election. Heller said his work on the issue isn’t related to his efforts to win re-election. “It’s the same policy I’ve been advocating since I’ve been in Washington.”

Tesla May Emerge a Winner in Nevada’s Toss-Up Senate Race

“That tax credit needs to be expanded,” Heller said in an interview.

Rosen, now a Democratic Representative, agrees. She announced in June she was co-sponsoring a House bill by Vermont Democrat Representative Peter Welch, H.R. 6274, that would extend the tax credit as well. That bill has been introduced in the House Ways and Means Committee.

“Incentivizing the use of electric vehicles will be good for Nevada’s economy and our environment,” said Stewart Boss, a Rosen campaign spokesman. “Jacky Rosen voted against the House Republican tax plan that would have repealed this tax credit last year, and she was proud to help introduce legislation in June to extend the electric vehicle tax credit at the federal level for another 10 years.”

Heller’s bill hasn’t been introduced but it may be incorporated into a new round of tax cuts or into a package extending already expired tax breaks that Republican leaders are considering moving after the November midterm elections, which will decide control of Congress.

“It really demonstrates an opportunity for Heller,” said Kevin Book, managing director of Washington-based consultancy ClearView Energy Partners. “Getting the credit out there in September could give that senator an opportunity to campaign on saving it.”

There’s no guarantee Heller’s measure would be included in any tax plan that gets a vote. The House last year tried to eliminate the tax credit altogether, though Heller was credited with defending it.

And the overall prospects for the bill could hinge on the results of the election, said Senator Rob Portman, an Ohio Republican, who serves with Heller on the Senate Finance Committee, which has jurisdiction over the tax code.

“It’s something I’d like to work with him on,” Portman said in an interview.

For more on Tesla, check out the Decrypted podcast:

©2018 Bloomberg L.P.