New Bill Focused on Expanding EV Tax Credits

Electric Car Vehicle Tesla Image by Free-Photos from Pixabay
Image Credit: Pixabay

Most experts agree, were it not for a plethora of federal, state and local financial incentives in recent years, including tax credits and rebates, U.S. solar energy would not be nearly as large as it is. Last week, a bipartisan group of U.S. senators and representatives decided electric vehicles (EVs) should benefit from the same treatment.

On April 9, Sen. Debbie Stabenow (D-Mich.), Sen. Gary Peters (D-Mich.), Sen. Lamar Alexander (R-Tenn.), Sen. Susan Collins (R-Maine), and Rep. Dan Kildee (D-Mich.), introduced S.1094, the "Driving America Forward Act." If the bill becomes law, the result could be as beneficial to electrical contractors who are involved in the instillation of EV charging stations and infrastructure as the growing demand for solar has been to contractors who have been involved in solar power installations.

According to the sponsors, the current $7,500 EV tax credit, which allows taxpayers to deduct part of an EV purchase cost, phases out over 15 months once an automaker reaches 200,000 cumulative EV sales. For example, Tesla saw the tax credit for the sale of its EVs reduced to $3,750 on Jan. 1, 2019, and General Motors saw the tax credit for the sale of its EVs reduced to $3,750 on Apr. 1, 2019. Tesla estimates its credit will fall to $1,875 in July and expire by the end of 2019. GM expects its credit will fall to $1,875 in October and expire by April 2020.

The new bill is designed to provide each EV automaker with a $7,000 tax credit for an additional 400,000 vehicles on top of the existing 200,000 vehicles that are eligible for the current $7,500 tax credit.

Numerous automakers and environmental groups, including the Sierra Club, support the bill.

In an April 10 statement from the Alliance of Automobile Manufacturers, Dave Schwietert, interim president and CEO, stated, "This bipartisan bill will help drive deployment and consumer acceptance of these energy-efficient, alternative powertrains. Automakers are investing substantially in electric vehicles, with 58 models on sale and more coming, but overall sales remain low."

And, as noted earlier, if the bill becomes law, it will be good news for a number of electrical contractors, in that the demand for charging infrastructure, along the nation's highways, in communities, in business complexes, and in residential settings, will continue to grow.

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