Currently, the full federal EV incentive phases out after 200,000 are sold.
GM, Ford, Stellantis, and Toyota jointly reached out to Congress.
Costs are increasing for everything including automobile production. Automakers are feeling the crunch and want to limit the impact economic pressures and supply chain constraints can have on pricing. This is why GM, Ford, Stellantis, and Toyota have asked Congress in a joint letter to remove the EV incentive cap.
The Federal government currently grants a tax credit of up to $7,500 on the sale of new EVs, up to a maximum of 200,000 sales. GM and Tesla have both crossed that threshold while others like Ford and Nissan are closing in.
The automakers have asked for the cap to be lifted and render the credit available for a while yet. The letter states: “We ask that the per-(automaker) cap be removed, with a sunset date set for a time when the EV market is more mature,” as reported by Reuters.
The timing of the letter is motivated by the growing concerns that Republicans, should they retake control of one or both houses of Congress next year, will cut them out altogether. Even so, some Democrats no longer see the use of these incentives.
Senator Joe Manchin, a Democrat, said: “There’s a waiting list for EVs right now with the fuel price at $4. But they still want us to throw $5,000 or $7,000 or $12,000 credit to buy electric vehicles. It makes no sense to me whatsoever,” Manchin said. “When we can’t produce enough product for the people that want it and we’re still going to pay them to take it — it’s absolutely ludicrous in my mind.”
A $12,500 tax credit was proposed by the Biden administration last year.