The United States federal government is looking to electrify the everyday transportation by ramping up electric car incentive program as a part of a major infrastructure bill.
It is not clear how the US federal government plans to spent the money, but we are hearing that the electric car tax credit might increase to $10,000, up from $7,500.
Last week, the Biden administration outlined its infrastructure plan, which includes a summary of a planned $174 billion investment in boosting the electric vehicle market.
According to the summary, the administration confirmed they are planning to reform the electric vehicle incentive program. Currently, it stands to doll out $7,500 in tax credit on new electric vehicles up to 200,00 units per manufacturer.
Though the executive summary is vague about the reform as it confirms that it will not only take on the form of tax rebates but also “point of sale rebates” and that the electric car incentive program will be applicable to “American-made EVs.”
In the past few months, the Democrats have gained a majority position in the federal government. Several new reforms related to the electric car incentive program have been proposed to remove the 200,000 unit limit per manufacturer in addition to few other things.
The Electrics Cars Act has been proposed that aims to eliminate cap on actual volume and introduces a 10-year period incentive for the consumers to purchase an electric car.
It will allow the buyers to have the credit applied at purchase instead of waiting until tax season to get the credit. However, the latter would be possible and can be done over a five-year period if needed.
The Electric Cars Act is much closer to what was announced in the executive summary of the infrastructure plan. But it is not clear what is the outcome of the bill becoming a law.
Additionally, several Democrats also introduced the Growing Renewable Energy and Efficiency Now (GREEN) Act that focuses on reforming the program.
In short, the automakers that have already met the threshold will get access to a new $7,000 tax credit for up to 400,000 additional vehicles until the new phase-out period starts again.
Dan Ives, one of the top-rated Wedbush analysts that follows the electric vehicle market says that there is a rumor circulating in Washington D.C that the new program incentive reform will increase the tax credit to $10,000.
If the rumors turns out to be true, then it is very likely that the new electric car incentive program will accelerate the sales of electric vehicles in the US.