This brings Tesla’s average tax rate over the past three years to 0.4 percent.
Elon Musk’s Tesla paid a total of $0 in federal income taxes in 2024, new tax reports show, despite the company having raked in billions of dollars in income and being the most valuable car company in the world.
Citing Tesla’s year-end financial report released this week, the Institute on Taxation and Economic Policy (ITEP) reports that Tesla paid a 0 percent federal income tax rate last year, even as the company reported $2.3 billion in income.
In 2023, Tesla paid $48 million in taxes on $3.1 billion in income — a 1.5 percent rate. And, in 2022, when it reported $5.5 billion in income, Tesla also paid a 0 percent tax rate.
This brings Tesla’s average tax rate over the past three years to 0.4 percent, or 50 times less than the statutory corporate tax rate of 21 percent.
This is despite the fact that Tesla is valued at over $1.2 trillion and is owned by the richest man in the world, with a net worth of over $400 billion and who was awarded a $101 billion pay package by Tesla shareholders last year — though this package has been rejected by a judge.
Due to the nature of the U.S. tax system, which heavily favors corporations and the wealthy and enables sophisticated tax dodging methods, Musk is also one of the many ultrarich Americans who pay a far lower tax rate than the average American. Advocates for fairer taxation have said that, due to the way that tax law is written and enforced, it is essentially optional for Musk and other billionaires to follow tax guidelines, allowing them to hoard more and more wealth while the working class struggles to get by.
According to ITEP, Tesla was able to avoid paying $500 million in taxes by using accelerated depreciation, a tax avoidance method and incentive for businesses which allows companies to write off the costs of an asset faster than it w
21 Comments
spiderfarmer
This will be the downfall of the USA. With the government filling up with grifters, the people and companies who still pay up will feel like losers.
casenmgreen
I may be wrong, but I understand this is because the company invests all of its income into its business – which means more jobs, work for other companies, and so on.
I think it better money goes into the economy, in a reasonably efficient way, rather than being taken by the State, and used in an unreasonably inefficient way.
erulabs
> "hoard wealth"
> No mention of reinvestment
> "Tesla was able to avoid paying … taxes … by claiming … tax credits" (presented as bad somehow)
> "We're not backing down"
Where or where is the media coverage that attempts to speak to people who don't already buy in to the premise? This isn't journalism it might as well be blogging. Congratulations, you've made the world more polarized!
fishtoaster
Sounds like this is the result of "accelerated depreciation." As far as I can tell, that's a strategy that ultimately allows you to pay less tax one year and more tax in a later year. I don't have a strong feeling on the value of that particular tax law, but it seems somewhat less nefarious than the implied "not paying taxes at all."
SeanAnderson
I wish this article was written with a less biased tone. I'm genuinely interested in understanding it better.
As far as I can tell, the article cites two things: $500M tax savings by using an accelerated depreciation schedule (unclear if they saved $500M more by using accelerated vs a regular depreciation schedule, but I assume no) and they claimed $300M in tax credits.
The article doesn't address the other $1.5B, presumably because it's easier to defend. I didn't read through the 10-K to try and figure this out.
I don't really know enough about what an accelerated depreciation schedule implies, but, taken at face value, they'd have to pay more in taxes in a deferred year which doesn't seem like foul play to me. Tax credits seem to make sense for an EV company?
EDIT: I did some learning, woohoo.
Federal corporate tax rate in America is 21%. The $300M in tax credits is post-tax not pre-tax. The $500M is a pre-tax deduction.
$2.3B – $0.5B = $1.8B
$1.8B * 0.21 = $378M
$378M – $300M = $78M
So, I can't really explain why they didn't owe ~$78M in taxes, but I assume rounding and cursory other stuff. The article probably didn't call out other, minor deductions, but it's also fair of them to not have done so. I was wrong when I said, "The article doesn't address the other $1.5B, presumably because it's easier to defend."
I think the real thing here is the weaponization of EV tax credits as some sort of boogeyman. Personally, I'm all for incentivizing EV companies to create in America.
andreygrehov
> Sharon Zhang is a news writer at Truthout covering politics, climate and labor.
In other words, no experience with how corporate taxes work.
cozzyd
Hmm I have an idea for how DOGE can raise more revenue…
blackeyeblitzar
Are we still doing this in 2025? The same complaints were brought up about Amazon years ago. Companies can have no income tax liability based on the tax credits they get (for R&D or numerous other possible reasons), the way they depreciate assets, how their profits and losses are managed from an accounting perspective, etc. It doesn’t mean there is anything wrong happening. In fact it probably means the right thing is happening – companies typically are able to lower tax liability by doing things we incentivize them to do.
lvl155
You know what’s ironic is that Tesla survived because of Obama era subsidies. They were desperate to get one private enterprise to succeed because so many solar and other “clean” energy private ventures failed during that period. So, in my view, Obama created Elon. Now the rest of America has to deal with it in addition to the abject failure that is PPACA which ballooned US healthcare costs (not that Republicans have any alternative solutions or the desire to fix it).
wnevets
Why pay taxes when you can just buy the Whitehouse? It's so much cheaper.
vtashkov
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anon-3988
Can a private citizen do the same things that companies do? People reinvest in themselves too.
xnx
Dupe: https://news.ycombinator.com/item?id=42885688
declan_roberts
Absolute trash article written by somebody with an axe to grind, probably because of Elon's political visibility.
This is standard practice for all growth companies because they are reinvesting (spending) the profits to grow.
idunnoman1222
Itt feeding the trolls @ truthout
kemotep
A Single Tax regime aka the Land Value Tax would make these articles a thing of the past.
We could solve the deficit, pay down our debts and many people would pay less in taxes, if we eliminated all taxes and replaced them with a Land Value Tax.
normalaccess
These topics always remind me of this Dave Chappelle skit.
The system IS rigged, and everyone knows it.
https://www.youtube.com/shorts/lNi9DIVkXpo?feature=share
swframe2
trump spreads his income perfectly across all his LLCs. Their expenses always exactly match their income to the penny. I wonder why he is able to do that?
holyknight
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lotsofpulp
The d
icameron
I’m still shocked that Tesla income is just 2.3B, compared to like, Meta who reports 62.3B net income. I didn’t realize how tiny Tesla is for the amount of media attention and stock valuation they have. Even amongst automakers they are tiny. Toyota had like 32B net income.