Washington fails to extend the federal EV tax credit; what’s next?
01.08.2020 - by Plug In America
Washington fails to extend the federal EV tax credit; what’s next?

Despite a flurry of activity in December and thousands of emails and phone calls to Congressional offices (thank you!), an extension of the federal EV tax credit was left out of the final federal spending bill. According to Senator Debbie Stabenow, it was left out due to “extreme resistance from the president,” despite support from both sides of Congress. While the tax credit has been phasing out for Tesla and GM vehicles, it is still in place for automakers that have yet to sell 200,000 vehicles.

While this outcome is obviously not what we wanted, there are a few positives. The EV tax credit extension went from being a mostly unknown credit to one of the top Democrat priorities because of the strength we were able to demonstrate—and with a good number of sympathetic Republicans too. There were multiple letters sent from House Democrats to House Leadership calling for extending the EV tax credit. There were numerous op-eds written in papers around the country calling for extending the EV tax credit. There were advocacy days on Capitol Hill attended by the top utilities in the country calling for extending the EV tax credit. All this attention to the EV tax credit and EVs will certainly lead to more supportive policies at the state level and will set the stage for the next opportunity at the federal level to pass supportive policies.   

And what are the next opportunities to extend the EV tax credit? Some members of Congress are looking to revive negotiations on extenders and energy tax credits in 2020. Others are looking to the House Energy and Commerce Committee and the Senate Energy and Natural Resources Committee to bring a bipartisan energy package together. Or, there’s also the possibility that a broad transportation infrastructure package moves through the House and back to the Senate. And of course, there’s always the lame duck session of Congress in November and December, which is probably the next big chance, though that also may depend on the election outcome. With new jobs and EV manufacturing being created in OhioTennessee, and Georgia, that certainly could help to bring some bipartisan support to the table, as well.         

 And what’s the math after the EV tax credit for Tesla and GM? Is an EV still a good deal? Is a Tesla or a Chevy Bolt still an amazing car? Definitely! While we still need the federal EV tax credit to work for more consumers for a longer period of time, EVs still offer a better ride and will save consumers money in the long-term compared to a gas vehicle. Demand for these clean cars continues to rise, despite any negative news articles or any ploy from the oil industry.    

Plug In America has been fighting for the EV ever since the days of Who Killed the Electric Car? in the early 2000s. Now, 20 years later, we continue to keep fighting.

24 comments on “Washington fails to extend the federal EV tax credit; what’s next?”
  1. Stephen Barr says:

    Eliminating the EV purchase tax credit is a good idea. As the great majority of those purchasing EVs are wealthy, this has basically ended up as a tax break for the rich. Instead of subsidizing the purchase of the vehicle, spend this same money in incentivizing the construction of fast charge stations meeting SAE CCS charging standards.

    When one can actually use an EV to take a non-interstate, back roads trip, car sales will not be an issue.

  2. Joe Meyers says:

    I agree with the opinions that imposing a pollution tax on all fossil fuel burning vehicles (ICE vehicles) will and should reduce the sale of fossil burning vehicles in favor of BEV’s.
    And more and more people who can afford to will think about giving up their ICE vehicles for those BEV’s because that pollution tax will make gasoline and diesel fuel too expensive. (Of course, the government vehicles and owners of commercial fleet vehicles with the name of their businesses mentioned on them can apply for a waiver exempting them from paying pollution taxes.)

    I suggest that the government charge a $1.00 a gallon on pollution tax on top of the gasoline tax. Look at the math if you like my suggestion.

    The latest statistics show that as of Q1 2019, there are 276 million vehicles operating on the roads throughout the United States. It also shows that as of last October, over one million BEV’s were sold in the United States. So, let’s deduct one million from 276 million. That equals 275 million ICE vehicles plus 1 million BEVs. (ICE stands for internal combustion engine and BEV means battery-electric vehicles.)

    So, 275 million ICE vehicles X $1.00 pollution tax equals $275,000,000 per gallon. Or $5,500,000,000 for every 20 gallons added to 275 million gas tanks. Isn’t that 5,5 billion dollars? Of course, the government would be collecting a whole lot more then that figure especially when the trucks have a much bigger tank then the cars do.

    If you agree with my suggestion, I think the government will have more then enough money to resume giving $7,500 tax credit for every BEV sold regardless of how many each manufacturer sells and pay for thousands or even millions of public battery chargers. In addition, the government can use any remainder left over to repair or replace the roads and bridges nationwide. Think about this suggestion. I believe that will be a great solution in order to save our environment. Of course, the gas stations and refineries as well as auto manufacturers and dealers selling mostly or only ICE vehicles may not go for this suggestion.

  3. Jay says:

    As Ron said previously, Tesla & Chevrolet are now being penalized for being early providers of EVs. Congress should make it right by putting a cumulative ceiling on tax credit subsidized EVs and PHEVs. Then, the first to market OEMs would get all of the benefit of establishing/expanding a viable market for EVs/PHEVs. The Cumulative (pool) ceiling (instead of individual manufacture limits) would be 200,000 per USA OEM manufactures: BMW, Chevrolet, Chrysler-Fiat, Ford, Honda, Hyundai/Kia, Mercedes, Nissan, Subaru, Tesla, Toyota, and Volkwagen. For the compliance only EV providers, you’d get as little as you deserved for minimal contribution. So figure, 200,000 x 12 OEMs = 2,400,000 EV/PHEV units. First EV/PHEV units sold, qualify for a IRS consumer tax credit until the 2,400,000 OEM EV/PHEV pool expires. That would get every OEM’s attention. Pitfalls? Tesla has a China factory now, and I suspect many of those Model 3 and Model Y’s would be shipped to USA, for better or worst. GM would easily pump-out more Bolt EVs or other improved models and Ford would have kept their C-Max Energi PHEV and Focus EV manufacturing lines going and perhaps improving. Did I forget any USA OEMs? I know, many of you have a similiar idea; just saying…j

  4. Jeff j. says:

    The 2019 and coming soon 2020. Ev Niro.
    Is one of best values out there also the best warranty. 10 yrs. / 100,000 miles. Need to look at them. And over 250 miles on a charge.
    Take a look at it.

  5. Liem N. says:

    Please update the article to reflect the affected vehicles. I guess many folks were as confused as I was.

    Thanks.

  6. Chris says:

    So does that mean the federal tax credit will go away all together or does this just mean that it’s not being extended for Tesla and Chevrolet?

    1. Silvia Gonzalez says:

      Great question! The federal EV tax credit is not going away anytime soon. This article is regarding the tax extension for Tesla and Chevrolet.

  7. James B Wood says:

    Instead of an EV Tax Credit, we should be working to eliminate all subsidies to the fossil fuel industry to level the playing field.

  8. BRian Pletcher says:

    @D.C.
    Unfortunately, the Leaf was probably one of the worst designed EVs mass produced, and many like you feel burned, rightfully so. By not putting technology to temperature control the batteries it was destined for a declining range and loss in value. Nissan blew an opportunity to make it right by denying claims, not extending warrantees when the problem was obvious, and not giving a massive price reduction of a customer was willing to give them a second chance. I think Chevrolet Bolt will not have those problems, and as a result won’t see the same drop in value you’ve experienced with your Leaf. I hope you give EVs a second chance.

  9. D.C. says:

    Define Long Term: “EVs still offer a better ride and will save consumers money in the long-term compared to a gas vehicle.” The premium paid for these vehicles without the tax incentives is simply too high to attract the number of new buyers needed to mainstream electric vehicles. They lose value too quickly and there is no trade or resale value for most EV’s compared to a comparably price gas vehicle. I own a 2013 Leaf that has obviously lost some capacity and almost must be replaced out of necessity. Unfortunately, it now isn’t worth much in trade or resale considering it’s a vehicle with premium features. I’ve been excited for the new EV’s coming to market but without the incentives they are cost-prohibitive compared to efficient gas models or hybrids. Without an extension, I think my Leaf may be the first and last EV I purchase unless prices for EV’s become more competitive with their gas counterparts. At this point, i would rather see more R&D and incentives given to companies that provide services to recycle, replace and upgrade batteries in older EV’s. To me, this is the real future if EV’s are to succeed, not just policies designed to push sales of newer and newer vehicles that continue to climb in price, not decline.

  10. Ron says:

    While I think EV credits are a good thing in general, the implementation was wrong headed. The credits penalized companies like Tesla and GM who were into the game early.
    Hopefully they can be restarted with rules that benefit companies actually delivering electric vehicles in quantity.

  11. Larry H says:

    Several states are enacting new EV taxes, to replace the lost fuel taxes because EVs use no gasoline/diesel. Illinois slapped on a extra $100 per year to EV vehicle registrations (that’s on top of a $50 per year increase applicable to all vehicles).

  12. Craig Toepfer says:

    A $1000 pollution tax on gasoline/diesel cars for every mile/gallon under 30 mpg would make sense along with the restoration of the EV credit for all EVs until 25% market share is reached. You know it is the right thing to do

  13. Kerry Miller says:

    I am not sure what you just said! But the goal of incentives is to get more people to drive the new technology, and that’s what they do. After a while, the technology will catch on, get cheaper, and sell itself. I bought my EV with the help of a tax incentive several years ago, It’s great, and I have NO regrets! Not worried about the resale, or making a profit off it — not selling.

  14. DAVID MAGINN says:

    We need to make this a bipartisan issue. A lot of Conservatives tend to be Republican. Conservatives (myself included) are concerned about the environment and the cost associated with it both human and financial. Conservatives are also into saving money so EV’s and solar are a good fit.

  15. Julie says:

    When does this take effect?

  16. Russell says:

    Tesla 3plus for ~35,500 vs a Nissan Leaf at ~20,000 for the second car.I know which one I would prefer.

  17. Ed says:

    I paid more for my car because of the tax credit when the tax credit went from $7,500 to $3,750 the price of the same car went down. The numbers don’t lie the tax credit doesn’t help the consumer .

  18. Steve Sears says:

    I too have thought of that Gas Tax on Pollution with the usage of those money’s to finance the EV Rebates and
    encouraging a technology development to reduce the Co2 creation. This would help with the transition away from Fossil Fuels to the more efficient clean energy.
    You might even extend this concept to help the Solar Energy rebates by taxing the electric energy produced by Fossil Fuels.

  19. John says:

    My experience tells me you will lose any benefit the credit gives you now … later when you sell or trade it… In your case it may be a benefit but to many others it deprecates the vehicle… Technically the car is worth what you paid minus the “incentives” because although it may work out for some it is a kickback to makers and dealers from special interests lobbying for your tax dollars… Glad it can help you and maximize the benefit by driving it into the ground… ☯️👍😎

  20. Nancy says:

    We would not have been able to buy an electric car without it. We would have ended up with a much cheaper car with decent gas mileage, perhaps, but now my husband can do his 140 rt commute with no fuel. The air is a tiny bit cleaner because of it.

    Where is the auto industry in fighting for this tax credit for its consumers?

  21. Aaron Kalb says:

    Does that mean the tax credit covering the install of home charging was not extended?

    1. Silvia Gonzalez says:

      This article is only referring to the federal EV tax credit extension for Tesla and GM.

  22. Lynn Henke says:

    And Utah is taxing EV’s and Hybrids to recoup the lost gas tax revenue. Utah also has a huge air pollution problem that would be worst without the EV’s and Hybrids. So listen up Utah, how about a pollution tax based on gallons of gasoline used?

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