EV industry fights congressional plans to abolish federal EV tax credit

The latest salvo in the US government’s war on technology is contained in a House bill with the Orwellian title of the Tax Cuts and Jobs Act, which would eliminate the federal tax credit for EV purchases.

There’s good reason to believe that killing the tax credit could cripple America’s nascent EV industry. In Denmark, when EV tax incentives were eliminated, sales dropped to almost zero. When the state of Georgia eliminated incentives in 2015, EV sales crashed from around 3,000 per year to around 200. Michael Arbuckle, Nissan’s Senior Manager of EV Sales and Marketing Strategy, recently told Charged that LEAF sales in Georgia plummeted from 80% of the national total to 7%.

Faced with the potential for job losses and a further erosion of the US’s competitive position, the EV industry is marshalling its forces to fight the proposed repeal. Tesla and GM, the two main US EV-makers, have each issued a statement in support of the tax credit. “Because General Motors believes in an all-electric future, we will work with Congress to explore ways to maintain this incentive,” the Detroit automaker told Electrek.

EV advocacy groups are mobilizing to defend the tax credit.

“The credit…created with bipartisan support in Congress, is needed to continue US innovation in electric vehicle components and infrastructure at a time when other countries, such as China, have announced plans to dominate this market,” said the Electric Drive Transportation Association. “Abolishing the plug-in credit will hurt consumers who want electric options and threaten the economic potential of the electric drive industry, which already employs more than 215,000 Americans. Prematurely terminating the credit…will consign the US to be an ‘also-ran’ in the global electric drive marketplace that America built.”

Plug In America believes that “abruptly ending the $7,500 federal tax credit for EVs will significantly hurt the electric vehicle market. The organization has created a call to action that makes it easy to send a message to your Representative and Senators, telling them to leave the federal tax credit alone. Click here to send a message to your elected officials in support of the existing tax credit, or here to find contact info for your Representative and Senators.


Source: Bloomberg, Electrek, Wired

  • http://www.carnewscafe.com electricnick

    Maybe this would be a good time to introduce a sliding scale incentive instead of a flat out one.

    • Jeff Ronning

      It is a linearly variable incentive based on pack energy where a minimum of 4 kWh pack receives $2500 tax credit and 16 kWh receives $7500 which is the max amount. All EVs get the max amount because they virtually all have more than 16 kWh. So PHEVs typically receive a tax credit of $5 to $7K. The whole auto industry has benefited from long term policies like the credits and technology roadmaps. The new administration is throwing a wrench in the works…

      • http://www.carnewscafe.com electricnick

        Yes, of course. I mean a sliding scale depending on battery pack capacity and income salary. And yes, I’m very aware of how people can cheat. That’s another Pandora’s box I’m fortunate not to have to resolve.

        If this administration is “pro business”, than that should appeal to all involved.

    • leptoquark

      There are no doubt more intelligent ways to structure incentives, but given the choice between elimination on Jan 1 2018 or status quo, which is what’s at stake, I vote status quo. Don’t forget, status quo has a structured phase-out already built in.

      • http://www.carnewscafe.com electricnick

        Yes, that’s why this would be an ideal moment to push the debate further and help those who are just slightly out of reach. The incentives are not as important to most higher-end buyers as they could be for entry-level EV buyers. It would spark a much greater adoption level if we had a more pronounced sliding scale.

  • Terry Robb

    This is Kook brothers ability to influence the GOP to stop the EV credit. This shows how much influence big oil has on GOP. Big oil knows that their days are numbered. Big oil also knows that if EVs increase in sales and numbers so does technology that supports EVs especially batteries and electric motors. Need to call your representatives and say leave the EV tax credit alone. However GM and Tesla are at the end of the tax credit because of sales maybe also Nissan. This leaves Ford and Chrysler behind on sales and R & D to catch up with Tesla And GM. Once Tesla is moving with production of model 3 and battery factory is complete the model 3 may come down in price. EVs are easier to make once the production lines get up to designed production efficiency. Also if big oil gets their way with EV credit gone most likely petrol price will be back to 3 dollars or more a gallon.