Automakers are scrambling to defend the electric vehicle tax credit after House Republicans last week proposed eliminating it to help pay for their broader package of tax cuts. Lobbyists have quickly grouped to figure out how to save the tax credit, which the industry views as critical to promoting commercial adoption of electric vehicle technology.
“Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles. Because General Motors believes in an all-electric future, we will work with Congress to explore ways to maintain this incentive,” GM said in a statement.
Industry officials had understood that all tax deductions and credits — including the one for EVs championed by President Barack Obama — might be on the table for elimination as House Republicans developed their long-awaited tax plan. Senate Republicans are developing their own plan to overhaul the tax code.
Technology advances, greater economies of scale and government regulations have all helped drive the market closer to the point where automakers say they can profitably make and sell EVs. But the tax credits are viewed as an important bridge to full-scale market acceptance. They are especially critical to the sale of mainstream-brand EVs such as the Chevy Bolt and Nissan Leaf, helping to keep them at a competitive price point and magnify their impact on automakers’ fuel economy scores.
“Nissan has made significant investments in the development of market-leading electric vehicles and public charging infrastructure to support EV drivers,” Nissan spokesman Brian Brockman said. “We support continuing measures that help encourage greater adoption of EVs given the benefits they can provide such as lowering vehicle emissions and reducing America’s dependency on foreign energy sources.”
Under current law, consumers who purchase plug-in EVs qualify for a federal tax credit of between $2,500 and $7,500, depending on the size of the vehicle battery. The credit phases out for each automaker when it reaches 200,000 vehicles sold. No manufacturer has reached that figure.
