President Trump’s 2020 Budget Proposal Kills Electric-Car Tax Credits20
The federal electric-car tax credits survived the tax legislation overhaul of 2018, but President Trump himself has proposed the end to them. In his 2020 fiscal year budget proposal, the president said he would eliminate electric-car tax credits and suggested the move would save $2.5 billion in the next 10 years.
In total, the 2020 budget proposal is a $4.7 trillion document. The tax credit for EV buyers awards up to $7,500 to a buyer when he or she files their federal taxes the following year. The actual credit is based on battery size, with fully electric cars receiving the full amount, while some plug-in hybrids with smaller batteries receive less money in the credit.
Every automaker receives the same number of credits for 200,000 qualifying vehicles, but the battle for their survival has heated up in recent months. Both Tesla and General Motors triggered the phase-out period for the tax credits after selling 200,000 vehicles in the U.S. After reaching the cap, the credit halves itself to $3,750. The sum is available for buyers to claim for six months before it’s slashed in half again to $1,875 for another six months. After that, it disappears.
GM will be at a disadvantage as it looks to sell the Chevrolet Bolt EV and compete with new rivals still eligible for the $7,500 tax credit. The automaker has already teamed up with Tesla and Nissan to lobby Congress for an extension to the tax credit program. Other Republicans have also called for the program to end citing cost. On the other side of the aisle, some Democrats have introduced legislation to lift the cap entirely and provide unlimited credits.
GM also responded to the budget proposal and hit back at the idea of ending tax credits.
“We believe an important part of reaching a zero-emissions future and establishing the U.S. as the leader in electrification is to continue to provide a federal tax credit for consumers to help make electric vehicles more affordable for all customers,” the statement read. GM added that ending the tax credits now would be “premature” and “damaging” to its goals to make electric cars the new normal.
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Perhaps General Motors should pump the brakes on their ambition of full electrification. The Chevy Bolt compared to a Tesla is a no brainer and it makes GM look like chumps with the poor design and ambition to give the public something to be excited about. Basically they are offering you a Toyota Yaris when you can buy a Jaguar sports car!
I don’t think braking is the right option. When you have “competition,” you don’t just give up. You make your products even better. The challenge is that New GM doesn’t want to lose money. They want to build profitable EVs. They can’t magically wave a wand and expect battery cell pricing to be lower, metal prices to drop, wages to go down, etc. Obviously, they’re still working on EVs. My main concern for GM and other established manufacturers is that, despite all the money Tesla has lost, their infrastructure is really good (all their unique technologies, charging stations, etc.). That may keep them ahead of their competitors for a long time—if they have enough customers and can make enough profits on their vehicles.
Gm should just make the Buick line their electric line/global line. It would give gm a reason to keep Buick around
It sounds like this is their long-range plan for Cadillac, not Buick right now. It’s all about profitability. If we assume they’re just breaking even on the Bolt EV—probably not making a profit—what would be the point of replacing all profit-making Buicks with EVs globally? Eventually, if the market wants pure EVs and they’re able to deliver them while making a profit, that’s where the market will go. Right now, Buick buyers in the U.S. seem to want lots of internal combustion crossovers.
Because it was one of the “big three” leaders in electrification, GM has already built enough electric cars that their customers wouldn’t qualify for the tax credit, so GM customers shouldn’t care about this too much. I think this is the inevitable outcome and that it’s fair to the manufacturers that took advantage of the opportunity to build EVs. Otherwise, we’d just subsidize the latecomers.
Going forward, to push clean vehicle technology, I think the best option is to put additional taxes on fuel ($2-3 a gallon) to encourage everyone, equally, to purchase fuel efficient vehicles. Leave it up to the consumer if they want pure EVs, hydrogen, plug-in hybrids, or just want to pay extra to drive something inefficient. It’s predictable for the automakers and consumers alike—no more of the back and forth with gas prices that encourage people to buy big trucks, then efficient cars, then back to trucks and large utility vehicles. The tax money can go directly to fixing our infrastructure, which hasn’t been maintained properly for years.
You have some good points, but $2-3 per gallon is excessive. That will hurt people’s budgets. I have a Cruze and that would add $80 – $120 a month to my expenses. The best way, imo, is to do what the EV leaders have been lobbying for, and that is to either extend the credit. Or possibly tax those companies who haven’t adapted. Companies can afford it, the individual may not be able to. GM and Tesla should not be hurt because they were leaders in the industry for electric. Unfortunately the EV’s still need help in incentivizing purchase since there are still inconveniences (lack of charging stations, having to make adaptations for those who are homeowners (what about renters?)) and that’s why they need further incentive for now, until they become more convenient.
Even if you do not believe in Climate Change, the fact that oil is a limited resource is very real. The average non car enthusiast person has close to no idea how a car actually works and wouldn’t know the difference between an EV/Hybrid or a gas motor. The quicker we get those people behind the wheel of an EV for good, the more oil we will have for enthusiasts down the road.
Time for automakers to stand on their own on EV. The government can’t pay for everything nor should they,.
The way forward at first is higher priced models and sports models that can make a profit. This will cover the development cost and make it possible to make cheaper lower priced models in the future.
That is why Cadillac is the landing place for the development of these models.
Tesla had the formula on the S model of high price and profits but learn as GM has the lower end is just a money loser till cost come down on development of parts.
This is the same formula that was used on many high end options like HUD, Anti Lock Brakes and even Stability control; as they were all first seen and rolled out on development dollars of higher priced cars first till the systems became cheaper.
We have a military that has planes grounded and we have roads and bridges to be fixed. Cuts have to be made unless you want nothing left of your pay check as the rich do not have enough money to pay for everything contrary to some.
Agree. The other thing is, if you want an EV or PHEV, but can’t afford a new one without the tax credit, no problem, there are more and more coming into the used market. Volt, Bolt, Leaf, Model S, e-Golf, etc…. take your pick there are some very good ones available.
Having put 90,000 miles on a Volt has convinced us that a viable replacement for my silverado will be electric. Trump promised to clean out the swamp if elected but it seems he has been smitten by swamp fever himself. This kinda thinking might make us a third world country someday… sooner than later. If GM is breaking even with the Bolt then that shows an exponential profit improvement from the Volt which clearly show that affordable. profitable EVs are here and now – WAKE UP AMERICA!
And Scott, just a reminder here- big bro gov doesn’t pay for anything they just wastefully spend OUR MONEY! Maybe the cuts should start by getting rid of most gov alphabet soup agencies that take our money to “help” us so well. And understand that I am a vet with two sons serving and two more returned from the “sandbox” where we spend gazillions to protect”our interests” OIL! Maybe it’s time we quit burning the sh$t, don’t ya think? If we didn’t have to send our kids to keep that game going on and on and on, maybe we could use those very considerable resources to rebuild that failing infrastructure. And for all you folks that think that tax breaks and incentives are something new – I say , wake up again. Ranchers/ farmers get trillions in subsidies – over 20 grand per mile of fence built as just one example, oil companies have been enjoying them from the getgo ,etc. etc. etc. It really comes down to one big question – do we want our posterity to have any kinda decent orb to live on!.. politics make me sick.
The swamp IS getting deeper under trump and his fellow creatures arriving in D.C.
don’t forget we have golf trips to merde-de-lago to pay for!!!
just messing with you. we all know those are work meetings for big orange on the back 9.
big orange does best while holding his putter. his short game is bigly winning fantastic beautiful. the best in recorded history.
Love it. There should be no tax credits for any of these. Want to buy a green car (that isn’t really anywhere near as green as everyone wants to believe)? Great! Buy one. But don’t expect me to subsidize it.
Good! With deficits at record highs we need to cut back on unnecessary spending and let the people decide on what they want!
The swamp IS getting deeper under trump and his fellow creatures arriving in D.C.
Unnecessary spending, you mean like a wall?
somebody has to pay for big orange’s tax cuts because they aren’t going to pay for themselves!!!!
thankfully according to big orange, the budget will be balanced …. wait for it …. in 15 years!!!! and that is based on the rosiest of assumptions.
it would also add $8 trillion of debt over the next decade!!!! too much bigly winning.
just messing with you all. we all know big orange’s supporters don’t care about inconvenient truths.
I suggest people read how the tax credit works. It might save a lot of overreacting.
By all means lets just allow the EU and China to completely walk away with the EV market because our whole Government is bought off by Big Oil. What could possibly go wrong LOL
Why is it people fail to realize that China is going strictly to pure EV’s and ICE engines will not be allowed to be sold in the worlds biggest Car market?
If Europe and China are EV only, why would our Government keep backing Big Oil so our Big Three can fail again?
This would be really bad if, say, GM sold more cars in China than it does in the US.
acute swamp fever at it’s best – or worst!