New bill seeks to reactivate electric vehicle tax credit for Tesla and GM –

New bill seeks to reactivate electric vehicle tax credit for Tesla and GM

Illustration for article titled New Bill Could Revive Electric Vehicle Tax Credit for Tesla and GM, Includes Used Cars

Photo: Mark Ralston / AFP via Getty Images (fake images)

Once upon a time, you could get a federal tax credit of $ 7,500 on Teslas and electric cars from General Motors. But since both automakers surpassed 200,000 EV sales in 2019 and 2020, respectively, that credit has disappeared. However, I could come back thanks to a new invoice.

Democratic leaders of the Ways and Means Subcommittee of the US House of Representatives. Renewable Energy Growth and Efficiency Now Act (GREEN), presented by Representative Mike Thompson (D-Calif.) that would make Tesla and GM vehicles eligible for IRS tax credits once again, and for years to come.

Basically, the bill would allow customers to claim up to $ 7,000 in credit with the purchase of a new electric car, a reduction of $ 500 compared to the previous credit. That would now last until the automaker in question surpasses 600,000 EVs sold. More critically for Tesla and GM, the law would also lower their counts to 200,000, meaning that any cars both companies sold after their first 200,000 would not count toward the 600,000 car total.

As with the current American Clean Energy and Safety Act (ACES), the credits would be awarded on a technology-based sliding scale – fully electric vehicles would receive more than plug-in hybrids, for example. Plus, once a manufacturer sells 600,000 qualifying cars, future customers will only be able to claim up to $ 3,500 in credit for the next quarter. After that, the savings would be completely eliminated.

The proposal also includes provisions for the sale of used electric vehicles. Buyers could save up to $ 2,500, as long as the car in question is two or more years old and the asking price is less than $ 25,000. However, eligibility to buy used is linked to income and the limit is very low, since Title IV of the bill states (in bold by me):

The amount that … would be allowed as a credit under subsection (a) shall be reduced (but not below zero) by $ 250 for every $ 1,000 (or fraction thereof) for which the the taxpayer’s adjusted gross income exceeds $ 30,000 (twice that amount in the case of a joint return).

Of course, we have heard about him The Biden administration’s desire to push electric vehicles since the election, and restoring credits can help more of those cars hit the streets. Or notConsidering that there is evidence to suggest that the majority of people who buy electric vehicles are wealthy enough to do so regardless of eligibility for the tax subsidy.

An efficiency The used electric vehicle credit, on the other hand, would offer the double benefit of encouraging existing cars to staying on the roads and at the same time lowering prices for those who cannot afford new electric vehicles, the people who could actually use the subsidies more. However, those income requirements might really need another look. I’d be curious how many people earn less than $ 30,000 a year, less settings, I have even considered used electric vehicles.

Worth noting that an earlier version of the GREEN Act did not pass over the summer, although with a slim Democratic majority now, there is a better chance that it will materialize this time.


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