Wednesday, February 8, 2023
News Bigger US EV Tax Credit Might Not Be Any Bigger

Bigger US EV Tax Credit Might Not Be Any Bigger

A look at the good and the bad of EV bill

  • Bill expected to see a vote later this year

  • Would boost top tax credit to $12,500, but with some catches


A U.S. Senate bill that would boost the tax credit for electric vehicles to $12,500 has made it out of the senate finance committee. That could be big news for EV buyers, but a new analysis of the bill shows that even if the bill makes it into law, for many EV buyers the credits may be smaller than expected.

Called the Clean Energy for America Act, it covers a wide range of energy issues, but the big news is the EV and PHEV credits that could boost the total amounts to as much as $12,500.

But, as Forbes reports, not every buyer, nor every vehicle, will receive the maximum benefit. Some buyers could end up with no credit at all as the new bill would introduce a price cap for the first time.

The cap, says the report, would cut off any EVs with an MSRP of more than $80,000. That’s Tesla Model S and X, many electric Audis, Jaguars, Porsches, and some GMC Hummer and Ford F-150 Lightning models.

Most EVs, the report said, would qualify only for a base $7,500 credit, the same one offered today. The first increase, an extra $2,500, would apply only to qualified vehicles built in the U.S. The second increase of $2,500 would apply only to those built in the U.S. with union labor.

The former would exclude the Ford Mustang Mach-E from the extra credits, the latter would exclude Nissan, Tesla, and other automakers planning to build EVs in the US including Volkswagen and Mercedes-Benz.

Other limits would include a tax credit cap of no more than 30 percent of the total MSRP. The bill would remove the 200,000 total EV sales per automaker cap, which has seen GM and Tesla vehicles lose their credit eligibility.

A vote on the bill isn’t expected until later this year. That means that much could change, and in a tight senate there’s no guarantee of it passing at all.

 

 

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