The CEOs of several major automakers, including GM CEO Mary Barra, recently signed a joint letter urging Congress to lift the EV tax credit cap.
According to a recent report from Reuters, the joint letter was signed by the CEOs of the Big Three Detroit automakers (GM, Ford, and Chrysler-parent Stellantis), as well as Toyota North America. In addition to GM CEO Barra, this includes Jim Farley (Ford), Carlos Tavares (Stellantis), and Tetsuo Ogawa (Toyota North America). The automakers indicated that they have pledged to invest more than $170 billion through 2030 towards the development of electric vehicle technology, production, and sales.
As it stands, the current $7,500 tax credit is phased out once the manufacturer reaches 200,000 EV units sold. GM has already hit the cap, and is therefore ineligible for further consumer tax credits. Tesla has also hit the cap. Toyota expects its EV credits to expire by the end of the year, while Ford is on track to hit the cap by the end of 2022.
The automakers cite recent economic pressures and supply chain constraints as increasing manufacturing costs, thus raising prices for consumers.
“We ask that the per-(automaker) cap be removed, with a sunset date set for a time when the EV market is more mature,” the automakers state in the letter to Congress. There are growing concerns that an extension to the EV tax credit may not be possible in the future with Republicans poised to possibly retake control of one or both houses of Congress next year.
However, not all Democrats are convinced. For example, Democratic Senator Joe Manchin recently called into question whether an extension was needed in the face of high fuel prices and long wait-times for new EV purchases.
Last year, Democrats in Congress, as well as President Biden, proposed a boost to the EV tax credit to $12,500, including $4,500 for union-made vehicles assembled in the U.S. Biden has also backed a 30-percent credit for commercial EVs and a $4,000 used EV tax credit. In addition, Biden has called for phasing out credits for EVs made outside the U.S.