Chief executive officers from the 4 largest US automakers have banded together and have asked Congress to remove the current EV tax credit cap.
The CEOs sent a letter which asks Congress to renew the tax credit system that currently gives EV buyers $7,500 but ends when each carmaker reaches 200,000 vehicles in sales.
Last week, Ford Executive Chairman Bill Ford made an unannounced trip to Capitol Hill to make the case for extending the tax credit.reached sales of 200,00 qualifying vehicles Senator Debbie Stabenow proposed the Act, which would boost the $7,500 tax credit by $2,500 for vehicles assembled in the US and by another $2,500 for EVs built at facilities whose production workers are members of, or represented by a labor union, such as the UAW. Last year, many Democrats in Congress and President Joe Biden proposed increasing EV tax credits to up to $12,500 — including a $4,500 incentive for union-made, US assembled vehicles.
In April, Senator Joe Manchin , questioned the need to extend EV tax credits in the face of strong consumer demand and Chinese production of battery components. “There’s a waiting list for EVs right now with the fuel price at $4. But they still want us to throw $5,000 or $7,000 or $12,000 credit to buy electric vehicles. It makes no sense to me whatsoever,” Manchin said.
Most clean energy tax credits are nonrefundable, meaning they can only be used by taxpayers with positive tax liability or through the tax equity market. A refundable tax credit allows the taxpayer to receive the full tax credit in the form of a payment or other compensation regardless of how much tax is owed. A direct-pay option specifically refers to the option of receiving a payment for the full amount of the tax credit.
In other cases, existing tax credits, such as the Section 45Q credit, are inadequate and can be further improved to deploy emerging technologies such as direct air capture.The US federal tax credit on EVs was first introduced in 2009 by the Obama administration and went into effect on January 1, 2010. It was intended to help spur the sales of low and zero emissions vehicles in the US, including plug-in hybrids, fuel cell vehicles, and fully-electric models.
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