Two automakers will likely reach the 200,000 threshold for the federal electric car tax credits in the near future: General Motors and Tesla. Both automakers were early movers on the technology, which could put them at a disadvantage as electric cars and certain plug-in hybrids begin to sell in larger numbers.
To remedy this, Rep. Peter Welch (D-VT), has introduced a new bill in the United States House of Representatives that lifts the 200,000 cap and expands the tax credit to an unlimited amount of cars for 10 years. As the law currently stands, after making it through the recent tax-cut legislation, once an automaker sells 200,000 qualifying electric cars, the credits enter a sunset period.
Automakers that pass 200,000 vehicles sold then receive 50 percent of the original tax credit for two quarters, and then 25 percent of the credit for a final two quarters. After that, the automaker must sell their electric cars at full price. The credit is often advertised in the sale price and gives automakers advertising firepower. For example, the 2018 Chevrolet Bolt EV features a starting price of $37,495 but can be had for $29,995 with the federal tax credit.
H.R.6274 – To amend the Internal Revenue Code of 1986 to extend certain tax credits related to electric cars, and for other purposes, boasts two co-sponsors: Rep. Jared Huffman (D-CA) and Rep. Jacky Rosen (D-NV) and a version of the legislation will likely be filed in the Senate by Sen. Jeff Merkley (D-OR).
Rather critically, the new bill would make the tax credit available instantly, rather than having a new owner wait until tax season to receive the credit. It would also reinstate credits for purchasing an electric-car charging station.