A new bi-partisan bill would reform the federal tax credit for electric vehicles resulting in Tesla and GM buyers getting access to $7,000 on the next 400,000 electric vehicles.

There have been several efforts introduced over the last year to either handicap, save or even altogether kill the federal tax credit program for electric vehicles.

Under the current structure, an automaker triggers a phase-out period after delivering its 200,000th electric vehicle in the US – resulting in the $7,500 tax credit being gradually reduced to nothing over a year.

Tesla was the first to reach the threshold and GM has followed this year.

On one side, some Republicans and the Trump administration have been threatening to end the electric car tax credit.

On the other side, some Democrats have introduced a bill that would expand the electric vehicle tax credit and a coalition led by Tesla, GM, Nissan, and others has been trying to reform the EV federal tax credit to make more fair for every player.

Now we’ve learned that a new bill representing a compromise on the reform has found bi-partisan support.

Reuters reports that Democratic Senators Debbie Stabenow and Gary Peters, Republican Senators Lamar Alexander and Susan Collins and Democratic Representative Dan Kildee are introducing a bill today called ‘Driving America Forward Act’.

The main change that the bill would bring is an additional $7,000 tax credit for another 400,000 vehicles after an automaker reaches the original 200,000 vehicle threshold.

It would also extend the hydrogen fuel cell credit through 2028.

The bill is reportedly finding support from most major automakers, including Tesla and GM, as well as environmental groups.

Stabenow said that she aims to pass the bill as soon as possible.

Electrek’s Take

It’s far from a perfect solution, but it’s a lot better than the status-quo. It would likely help boost EV sales for the next 2 years until the market matures a little and more models become available.

As for the chances of this bill actually passing, it is encouraging that it already has bi-partisan support, but it doesn’t mean that it is a done deal.

I think Republicans and Trump can be convinced that it is a good thing since the status-quo currently put American automakers like Tesla and GM at a disadvantage to the foreign competitions.

That said, it sounds like the Republicans and Trump would prefer to kill the tax credit altogether, which would also get rid of the disadvantage.

I think this bill is a decent compromise that could pass compared to what the Democrats previously proposed.

What do you think? Let us know in the comment section below.


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