Bipartisan bill would triple number of EVs eligible for tax credit

Keith Laing
The Detroit News
Automakers could triple the number of electric cars eligible for federal tax credits under terms of a bipartisan bill introduced Wednesday in Congress. General Motors, which builds the Chevrolet Bolt, has hit the current 200,000-vehicle limit.

Washington — Automakers could triple the number of electric cars eligible for federal tax credits of up to $7,500, under terms of a bipartisan bill introduced Wednesday in Congress.

The measure would allow automakers to offer the tax credit for buyers of up to 600,000 electric cars. Current law 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. 

President Donald Trump has targeted the electric-vehicle tax credit for elimination in recent months. He suggested in a recent budget proposal that doing away with the tax break in 2020 would save $2.5 billion over a decade.

The bipartisan group of lawmakers backing the bill said the tax breaks to date have encouraged development and sales of electric cars.

“At a time when climate change is having a real effect on Michigan, today’s legislation is something we can do now to reduce emissions and combat carbon pollution,” one of the bill's sponsors, Sen. Debbie Stabenow, D-Lansing, said in a statement.

Others who introduced the bill were Sens. Lamar Alexander, R-Tenn.; Gary Peters, D-Bloomfield Township; and Susan Collins, R-Maine; along with U.S. Rep. Dan Kildee, D-Flint Township,

“Ten years ago there were no mass-produced electric cars on U.S. highways, and today, there are about one million and automakers are planning to make millions more,” Alexander added. 

The electric-vehicle tax credit has been controversial since it was established in 2008. 

Conservatives have argued the federal government should not be propping up electric cars at a time when car buyers have demonstrated a clear preference for SUVs and pickup trucks. They also say the benefit goes primarily to wealthy car buyers who can otherwise afford the hefty price tag that is usually associated with electric cars. 

"Relatively few Americans have electric cars. But every American taxpayer has helped pay to buy them and keep them on the road," Nicolas Loris, deputy director of the Heritage Foundation's Thomas A. Roe Institute, which is a conservative think tank in Washington, wrote in a February opinion piece that was published originally in the Richmond Times-Dispatch. 

"Who benefits most from these government giveaways?" Loris continued. Primarily people who don’t need help buying a car." 

Peters said Wednesday: “Expanding tax credits for electric vehicles would benefit consumers and our environment.

“Continued investment in advanced technologies of the future will help Michigan stay at the forefront of global auto innovation, spur job growth and move us toward a more sustainable and competitive transportation future,” he said. 

Kildee added: “Putting more electric vehicles on the road will reduce carbon emissions and support investment in American-made manufacturing.”

Alexander, whose state is home to a major GM, Nissan and Volkswagen plants, touted the progress that has been made in the range of electric vehicles in the decade-long lifespan of the tax credit he is now seeking to extend. 

“The all-electric Nissan Leaf that I bought in 2011 had a hard time getting me from the Capitol to Dulles airport and back," he said. "Its real range was about 70 miles. Today’s Nissan Leaf can travel 226 miles on one charge. Investing in American research and technology for better electric vehicles is one way to help our country and the world deal with climate change."

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Twitter: @Keith_Laing