Electric Vehicles

Congressmembers Proposes New EV Tax Credit That Might Work Against Tesla

Congressmembers Proposes New EV Tax Credit That Might Work Against Tesla

The Biden Administration is seeking to spend $174 billion to electrify the aging U.S infrastructure by pushing for increase electric car adoption in form of federal EV tax credit.

Out of these proposed funds, around $100 billion will be spent as rebates for the Americans who purchases an electric vehicle.

Another $15 billion will be used to jumpstart the electric vehicle charging infrastructure by building 500,000 new domestic EV charging station.

The latest information about the EV credit and charging station came from an e-mail that the U.S Transportation of Department sent to the members of congress, obtained by Reuters.

The support of EV adoption is a major portion of the Biden’s proposed infrastructure bill, which calls for approximately $2.25 trillion in total, making it one of the most expensive infrastructure bill in the history.

The EV credit will provide a major boost in electric car adoptions, mainly for the automakers who produces EVs. Although, Tesla and potentially GM might be impact by this bill since both are not eligible for the current $7,500 federal EV tax credit.

Both electric automakers have already sold over 200,000 EV and their massive push for the EV adoption resulted in them being indirectly punished.

Congressmembers Proposes New EV Tax Credit

On the other hand, many automakers are slow to propel forward with the electric vehicles still enjoy the benefit of the tax credit from the federal government.

The EV federal tax credit as it currently stands help foreign automakers as much as it helps domestic automakers.

While the congressmembers’ proposal is still in draft phase, there are possibilities of changes that could work against Tesla and General Motors.

Tesla is currently one of the most prominent world leader in the EV market. Though the price tag of their models is expensive, the company have been working hard to reduce the overall cost to make it affordable for an everyday person.

GM’s all new Hummer EV as well as upcoming electric Cadillac models will have very high price tags. So it is very unlikely that both electric automakers will get the benefit of federal EV tax credit under the current proposal.

U.S Senator Debbie Stabenow and Representative Dan Kildee are working on a new bill that will update the federal EV tax credit. Both political figure hope to set up a tax credit that favors affordable electric vehicles with long range.

This new bill will work in favor of Tesla’s Model 3, Chevy’s Bolt EV and Bolt EUV. But it also can work against most of Tesla and GM’s vehicles that have low range and high price tag.

Kildee said that the plan is to look at ways to make the federal EV tax credit more accessible to the middle and lower-income families as well as making the credit refundable.

As of now, there are a lot of new proposals and many changes is likely to be made before the final bill goes through. At this point, it is very early to draw conclusion. For now, it is a waiting game to find out what the U.S government’s plan is with the tax credit.

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