More electric vehicles are coming to the market, but the financial incentive from the federal government to entice people to pay the higher price for EV’s is stalling. Automotive News is reporting Congress has decided not to expand the tax credits for people who choose to plug-in rather than fill up.
Currently, the first 200,000 customers who buying qualifying vehicles from a manufacturer can received a $7,500 tax credit. Once that manufacturer reaches the 200,000 limit, the tax credit drops by 50% and then 25% during the next 12 months before being phased out entirely for that manufacturer. A bill introduced by Democratic Senator Debbie Stabenow of Michigan and others would have kept the $7,500 tax credit for the first 200,000 EV’s any manufacturer sells, and then offer a $7,000 credit for the next 400,000. After a manufacturer sold their 600,000th EV, the tax credit would have dropped by 50% before being phased out entirely after six months. The bill was sponsored by 60 organizations, including automakers like General Motors, Honda, Nissan and Tesla.
According to Automotive News, General Motors and Tesla have already sold 200,000 EV’s. So, the cap affects them. Other automakers who also make electric vehicles, but have not reached the cap can still tout the tax credit to attract customers.