Despite strong support for the extension and expansion of the federal EV tax credit, the effort appears to have run out of juice in Washington—specifically, at the Oval Office.
The proposal, which had bipartisan support in the Senate just last month, yesterday was cut out of a massive $1.4 trillion federal spending bill due to be passed this month—because of what Michigan Senator Debbie Stabenow described as significant opposition from the White House, according to Reuters.
It would have extended the existing cap of 200,000 eligible sales (plug-in hybrids or electric vehicles) to 600,000, while cutting the maximum credit from the current $7,500 to $7,000 and reinstating a tax credit for fuel-cell vehicles. There has been a long list of supporters, including the auto industry, the utility sector, and of course environmental groups.
The two automakers most affected by the EV tax credit, as it is today, are the two automakers that have sold far more plug-in vehicles than others: Tesla and GM.
Chevrolet Bolt EV charging at EVgo DC fast charge station
GM is without question the most affected by the White House–mandated withdrawal of the credit extension, as the only electric vehicle it currently sells in America is an affordable one—the U.S.-produced Chevrolet Bolt EV, for which $7,500 is a major dent toward its viability.
The amount of the credit that can be claimed by those who take delivery of Tesla vehicles fell to $1,875 in July 2019, and it will phase out completely to Tesla buyers after December 31, 2019. GM’s credit amount dropped to $1,875 in October, and it will go out completely after March 2020.
Both automakers have already hit the sales ceiling of 200,000 qualifying plug-in vehicle deliveries. The annual quarter after an automaker hits that total, the credit sunsets for applicable deliveries with a graduated decrease every two annual quarters—$3,750 for six months, then $1,875 for six months.
As of mid-2019, Nissan, Ford, and Toyota were all over the 100,000 mark—halfway toward exhausting their applicable deliveries.
