Trump wants to kill $7,500 electric-car tax credit

Keith Laing
The Detroit News
The president's proposed budget would eliminate the $7,500 federal tax credit for electric cars like the Nissan Leaf.

Washington — President Donald Trump wants to kill the federal tax credit that provides up to $7,500 to buyers of electric cars.

In a $4.7 trillion budget proposal for the 2020 fiscal year, Trump said eliminating the electric vehicle tax credit that has become a popular target for conservative lawmakers in recent years would save $2.5 billion over a decade.

Current rules allow automakers to offer credits for up to 200,000 electric vehicles per manufacturer. At least two major manufacturers, General Motors Co. and Tesla, have reached the limit and they have lobbied for a removal of the cap. 

GM pushed back on the tax-credit elimination.

"We believe an important part of reaching a zero-emissions future and establishing the U.S. as the leader in electrification is to continue to provide a federal tax credit for consumers to help make electric vehicles more affordable for all customers,” the automaker said. “We’ll keep doing our part by innovating to bring the cost down on electric vehicle and battery technology, but in the meantime removing the federal tax credit right now would be premature and damaging to these efforts."

The president's budget proposals are likely to run into strong resistance in Congress with Democrats controlling the U.S. House of Representatives. Lawmakers are not obligated to follow a president's budget requests, and Congress routinely ignored Trump's fiscal recommendations even when Republicans were in charge of both chambers.

Trump's budget also calls for the elimination of the Advanced Technology Vehicles Manufacturing loan program and other Department of Energy programs he deemed "costly, wasteful or duplicative." 

The program has been used by Ford to upgrade facilities in Illinois, Kentucky, Michigan, Missouri, New York and Ohio with the help of a $5.9 billion loan in 2009.

Nissan used a $1.45 billion loan in September 2010 to build plants for advanced battery manufacturing and environmentally friendly paint and to retool its Smyrna, Tennessee, plant for assembly of the all-electric Leaf. 

Tesla used a $465 million loan in January 2010 to develop its manufacturing facility in Fremont, California, to produce battery packs, electric motors and other powertrain components for powering all-electric vehicles.

Trump said in his budget proposal: "The private sector is better positioned to provide financing for the deployment of commercially viable projects."

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Twitter: @Keith_Laing