Eventually, the federal government will have to tackle the tax credit allotted for electric car purchases. And now, a third member of Congress has proposed changes to the system.
Republican Senator Dean Heller of Nevada has reportedly introduced a bill to lift the 200,000-vehicle cap for the credit, Reuters reported Tuesday. The bill has not been posted to the Senate’s website, but Reuters obtained a copy of the bill’s text. Instead of the 200,000-vehicle cap, automakers would receive unlimited tax credits through 2022.
The proposal also states that credits would go away entirely come 2022 for every automaker. Some companies have already said the proposal is unfair to automakers that haven’t begun selling electric cars, or wouldn’t have volume production for EVs by 2022. But, for automakers like General Motors and Tesla, it would be a major victory.
Senator Heller’s bill comes after Republican Senator John A. Barrasso of Wyoming introduced his own bill to gut the tax credits entirely. His proposal also creates a new alternative-fuel vehicle tax. Today, plug-in hybrid and electric car owners do not pay into the gas tax in the United States, which helps pay for infrastructure improvements. The bill aims to create a Federal Highway user fee for drivers of any alternative fuel vehicle.
Currently, once an automaker sells 200,000 qualifying vehicles, the tax credits enter a sunset period. Using Tesla as an example—it’s the first automaker to reach the cap—the company will see the $7,500 figure cut in half for the first six months of 2019. The final six months of 2019 will see the figure halve itself again until the cars receive $0 in tax credits come January 2020.
GM believes it will reach the threshold later this year, or in early 2019.
In the U.S. House of Representatives, Democratic Rep. Peter Welch of Vermont has introduced a third piece of legislation. His bill aims to lift the tax-credit cap like Senator Heller’s bill, but gives automakers an additional 10 years. The bill also calls for the tax credit to be applicable at the point of sale, which would likely be more appealing to consumers.
Comments
America needs these tax credits to promote the development of electric vehicles. If we don’t do it, China and Europe will do it for us. American manufacturers need to remain at the forefront of this technology.
Point of sale credit!
Work out a gov tax and or tariff cut deal with the manufacturers to cut the point of sale price, with a clear advantage to domestic made!
Drop these stupid tax rebates that only help the well off who don’t need them!
Will be far harder to pass then simply replacing the number cap with a date…
Great idea! While we’re at it, let’s dump the Earned Income Credit, Child and Additional Child Credit, Child and Dependent Care Credit, American Opportunity Credit, Lifetime Learning Credit, Foreign Tax credit and there are quite a few more. Let’s dump them all. In fact let’s dump the Income Tax.
Life means to live. but the article says just the opposite. Check your spelling Sean!
Sean if your gonna be the “lead” writer here, get your facts straight – again. We Volt (and other PHEV) owners pay the same gas tax as anyone else when we gas up. We just don’t do it as often as those who “volunteer” to do it more often by driving gas hogs. It’s a simple choice really, just one that most of the sheeple have yet to discover. And if it takes that kind of lunacy to buy votes in Wyoming, I am very glad to be living in AZ. The other two Senator’s proposals make some sense. And if we are supposed to feel sorry for our “poor” missing out on stealing more money from us 90+ percenters, might I suggest they just release some of the secret tech thay have hidden for decades – like anti grav – thus relieving them of the stress of maintaining our crumbling roads and bridges.