Republican Senator John A. Barrasso of Wyoming has introduced a bill to revoke the federal tax credit for electric cars. Currently, every automaker is eligible for $7,500 tax credits, but the legislation would kill the credits entirely.
Not only does Senator Barrasso’s bill, currently titled the “Fairness For Every Driver Act,” aim to terminate the tax credit, but the legislation also aims to place a new tax on alternative fuel vehicles. 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.
Previous attempts to scrap the tax credit failed, but Republicans came close to terminating them as legislators debated the tax reform and cuts President Trump signed into law last year. Eventually, senators left the tax credit in the revised tax code, but a standalone bill could gain more traction in the U.S. Senate.
The federal tax credit gives buyers of plug-in hybrid and electric cars up to $7,500 back when the owner files their taxes the following year. It is not applied at the point of sale, and the final dollar amount depends on the size of the vehicle’s battery pack. Those who lease a qualifying vehicle are not entitled to the tax credit.

2019 Chevrolet Volt
On the other side of the aisle, a Democratic congressman has introduced a bill to expand the tax credits and lift the 200,000-vehicle cap for automakers. Automakers, including General Motors, have spoken out for an increase in the tax credits. GM will likely lose its credits by the end of this year, or early in 2019. Tesla became the first automaker to reach the cap, and the credits will halve themselves until they run to $0 over the next few financial quarters.
Both bills are likely some time away from a full vote if they ever reach that stage. However, we’ll likely see lobbying ramp up as more automakers lose their tax credits. For GM, it puts the automaker in a tough situation as rivals begin to roll out electric cars with the full credits at their disposal.
Comments
Not a big deal. EVs will be purchased when the market is ready.
And the market is ready: Opel just got caught with widespread VW type cheating software in their diesels. These engines were developed on GM’s watch… wonder if the Cruze diesel is affected too?
The Cruze diesel was tested using the mobile test system the University of Wyoming researchers used to uncover VW’s cheating. It passed.
Interesting that a Senator thinks he can introduce this legislation. The US Constitution clearly states that all bills regarding revenue and spending must start in the House of Representatives.
It’s political posturing in a state with a lot of oil and gas jobs.
It’s not intended to pass. Just to send a message ahead of mid terms.
I’d like to see the credits expanded but not parsed out by manufacturer.
Sell 500,000 EVs….that’s 500,000 credits that you can take advantage of that your competitor can’t. That’s how it should be. Get on board with this tech development ASAP or you could be left behind.
“fairness for every driver act”… what a great idea! that way we can all breath the same crappy air together, like on an airliner. And let’s not make fun of the increasingly horrendous storms churned up from the ever warming oceans quite literally blowing off steam. Wonder who is filling senator de gasso’s off shore accounts? Good idea member twelve but maybe a million would better fit the marketplace. We the people really need to wake up to the need to vote against the gasoilcoal status quo by stepping up to the plate and supporting EV development by buying them!
Let me guess. He’s from Sinclair, WY?
Love the look on my low/fixed income relatives and friends faces when I tell them that the taxes they pay help the rich folks pay for their new electric toy.