A House Democrat is set to introduce a bill that would expand the electric vehicle federal tax credit in the U.S., while linking it to domestic automotive manufacturing.

Rep. Ro Khanna (Calif.) plans on introducing his bill in the coming weeks, The Hill reports. Khanna’s proposal would remove the limit of 200,000 deliveries that currently triggers a phase-out of the full $7,500 credit — a credit which is already phasing out for Tesla and GM.

The tax credit would be fully refundable at time of purchase under Khanna’s plan. The credit would also be linked to carmakers that produce vehicles in the U.S. Khanna said,

“Instead of Trump yelling at the GM CEO on Twitter to open up factories, which has no effect other than shoring up his base, this would say to GM, open up those factories and you can make electric SUVs because the government is actually going to help subsidize that.”

Khanna also sees his bill as a “concrete” application of the goals presented in the Green New Deal. It also seems to be strongly aligned with the goals of the EV Drive Coalition, a group formed last year by Tesla, GM, Nissan and others.

Another Bill

It’s worth noting that Khanna’s proposal isn’t the only bill concerning the EV tax credit that can re-enter the discussion in the coming weeks. Bloomberg Tax’s Ally Versprille tweeted that Rep. Peter Welch (D-Vt.) will reintroduce his own EV tax credit bill. That bill, first introduced in July 2018, would also remove the 200,000 delivery threshold, in addition to extending the credit for 10 years.

A number of Republicans have pushed to do away with the electric vehicle tax credit entirely, even wishing to add an extra annual EV tax.

President Donald Trump’s 2020 budget proposes eliminating the EV tax credit as well, though it’s unlikely to pass Congress.

Electrek’s Take

Not only would Khanna’s bill continue a successful program while removing the penalty for early adopters of EV technology, but it also ties in U.S. car manufacturing.

The extent at which the bill is “linked” to manufacturers is a bit unclear at this point. It may indicate that if carmakers produce any vehicles in the U.S., customers would be eligible for the full credit for EVs from those carmakers. But Khanna’s other comments more likely indicate the bill would tie the credit specifically to EVs manufactured in the U.S.

We’ll wait for more details to emerge, but there’s some political savvy to the domestic auto angle.


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