Tesla and GM are not getting EV tax credit reform, Trump reportedly intervened

Tesla and GM are getting their hopes of an EV tax credit reform squashed as Donald Trump reportedly intervened and threaten to kill the bill if it gets to his desk.

As we reported earlier this week, US Congress is considering an EV tax credit revamp that would help Tesla, GM, and used EV buyers.

Tesla and GM have become the first two automakers to hit the 200,000 delivery threshold to trigger the phase-out of their EV buyers’ access to federal tax credits.

It’s creating an advantage for Audi, BMW, Ford, and others basically for being late in launching electric vehicles in the US.

The new proposed reform would have added an additional 400,000 vehicles with $7,000 in federal tax credit after an automaker hits the initial threshold.

However,  Congress has now abandoned the effort to revamp the electric vehicle tax credit after hitting a dead end.

Senator Debbie Stabenow (D-MI), who has been pushing for reforming the EV tax credit, said that Trump intervened (via Bloomberg):

There has been extreme resistance from the president. I don’t know why the White House would want to stop jobs and the future of the auto industry.

Bloomberg reported that the White House killed the bill:

White House officials warned lawmakers that if they tried to expand the electric vehicle credit as part of a compromise spending bill, it could tank the measure, according to two people familiar with the matter. The issue is particularly heated in the West Wing and among conservatives who view the credit as mainly benefiting rich Californians and Tesla.

Several other publications are now reporting that the legislature has abandoned plans to extend the tax credit for electric vehicles.

Electrek’s Take

This is disappointing, but as I reported yesterday, it was to be expected.

I am not the biggest fan of the federal credit because it’s too easy for Trump and others to make the argument that it is “mainly benefiting rich Californians and Tesla.”

Instead, a carbon tax, which would represent the true cost of emissions, would be more representative and would correct the market without having to give a rebate.

However, the tax credit is already in place, but what this new legislation was doing was trying to correct it.

Now Tesla and GM, two of the biggest US automakers, are going to be at a disadvantage against foreign automakers in US EV sales, just for being early in producing electric vehicles.

The fact that the White House can’t see that is ridiculous. It would really help US jobs if they were to back Tesla and GM on this.

Of course, we have to be careful in pointing that out, too, because I suspect that Trump’s solution to that problem would be to kill the credit altogether, which would be a bigger detriment to EV adoption in the US.

It looks like there’s no winning on this one.