Bipartisan Legislation Hopes to Extend Federal Tax Credit
As the electric vehicle evolution continues, we’re inching ever closer to the expiration of federal tax credits for the purchase of an EV. A bipartisan group of U.S. lawmakers recently introduced legislation to expand the tax credit by 400,000 vehicles per manufacturer.
Since 2008, a federal tax credit of up to $7,500 has been available for the purchase or lease of an electric car. These funds are applied toward the amount of federal income tax owed, so the tax credit can vary. But only the first 200,000 vehicles from each carmaker are eligible. After that, the tax credit is sunset in increments over the next few quarters. Tesla and General Motors have already crossed that 200,000 sold threshold, while Nissan and Toyota are expected to reach it in the next two years.
The bipartisan group sponsored the “Driving America Forward Act,” which would augment the current structure with a $7,000 tax credit to an additional 400,000 cars per manufacturer. The legislation — supported by the Alliance of Automobile Manufacturers, the Sierra Club, the American Lung Association and the Edison Electric Institute among others — is facing significant opposition from lobbyist groups.