Clean Energy for America bill, including $12,500 EV tax credit, advances in Senate

A bill called Clean Energy for America advanced in the US Senate Finance Committee on a 14-14 tie vote. The bill, which contains a number of measures designed to incentivize clean energy, clean transportation and energy efficiency, must now be approved by the full Senate and the House of Representatives in order to become law.

Here’s how the bill’s sponsor, Senator Ron Wyden (D-Oregon) describes it: “On the federal tax books today is a hodgepodge of 44 different energy tax breaks for a host of fuel sources and technologies…The system is anti-competitive and anti-innovation. It puts the government in the role of picking winners and losers by giving some fuels and technologies big, permanent tax breaks while others have short-term, temporary extensions. The Clean Energy for America Act throws the old system in the waste bin. It replaces the old rules with a free-market, technology-neutral system in which reducing carbon emissions becomes the lodestar of America’s energy future. It can spark a wave of carbon-cutting, job-creating ingenuity all across the country.”

Few details about the bill have been reported, but the one that has grabbed the attention of the EV press is a proposal to boost the existing EV tax credit to as much as $12,500. The proposed measure, championed by Senator Debbie Stabenow (D-Michigan), would eliminate the existing 200,000-unit cap for individual automakers, but would phase out the credit over three years once EV sales reach 50% of US passenger vehicle sales. The existing $7,500 credit would be increased to $10,500 for vehicles assembled in the US, and to $12,500 for cars built by union labor. Only vehicles with a retail price below $80,000 would qualify.

As Reuters reports, the bill also includes a 30% tax credit for manufacturers to retool or build new facilities to produce advanced energy technologies including batteries, and new incentives to purchase commercial electric vehicles.

United Auto Workers President Rory Gamble praised the bill for ensuring that “EV production will directly create the good-paying union jobs of the future President Biden has championed.”

Republicans were less enthusiastic. “This is a frontal assault on my state,” said Senator John Cornyn of Texas. “This is an ideological jihad against the status quo…where many jobs in our country depend on the oil and gas sector.”

Source: Reuters