Miranda Green reports for The Hill:
The future of electric cars is in Congress’s hands, with lawmakers divided over whether to extend a popular tax credit.
Electric car manufacturers are only allowed to offer a federal tax break on their first 200,000 vehicles sold under a 2009 law, and many are now hitting that cap, most notably Tesla.
That’s setting off a fight in Congress, where Democrats are eager to extend the breaks and help the growing electric car industry but Republicans hope to end what they see as an unnecessary subsidy.
“It’s crazy that we might allow the electric vehicle tax credit to run out just as the American electric vehicle market is starting to gain a foothold,” said Sen. Jeff Merkley (D-Ore.), who leads a group
of senators who introduced a bill last week that would lift the cap.
The bill, called the Electric Cars Act of 2018, is backed by Sens. Martin Heinrich (D-N.M.), Catherine Cortez Masto (D-Nev.), Kamala Harris(D-Calif.) and Cory Booker (D-N.J.), among other Democrats.
It would extend the 2009 tax credit that helped popularize plug-in electric cars in their nascent days until December 2028.
Lawmakers are feeling intense pressure from the electric car industry to extend the 2009 tax credit.
Tesla and General Motors (GM), who are front-runners in the U.S. electric car manufacturing industry with their Model S and Chevrolet Volt vehicles, respectively, are already feeling the constraints of the cap.
Tesla announced in July that it hit its 200,000-car threshold and will start phasing back the $7,500 federal tax credit it can offer to buyers. It’s reported that GM will also hit the cap by the end of this year.
“There are projected to be over 7 million electric vehicles on our roads by 2025, and I will keep fighting in Congress to promote electric vehicles and other innovative technologies that reduce the impact of global warming and strengthen our economy,” Cortez Masto said in a statement.
A similar bill was introduced in the House in June by Reps. Peter Welch (D-Vt.) and Jackie Rosen (D-Nev.) and backed by 14 other Democrats.
Most supporters of the two bills hail from California, a state that is both Tesla’s hub and on the front lines of promoting renewable energy.
The bills to extend the tax credit also have broad support among electric car manufacturers. Automakers new to the electric car industry, like BMW and Mercedes-Benz, are poised to benefit in the short-term with Tesla and GM running out of credits. But overall there is a belief that the industry needs the tax breaks extended to keep growing.
“Electrified vehicles are a small but growing segment of our business in the U.S. so, yes, BMW does support the legislation,” said Kenn Sparks, a company spokesman.
“Electro-mobility will continue to grow in significance. In the next seven years, by 2025, BMW Group will offer 25 fully-electric and plug-in hybrid models in our worldwide lineup.”
Neither bill, though, has a Republican co-sponsor.
Read the full story
