Elon Musk Wants The Electric Vehicle Tax Credit To Disappear; Joe Manchin Might Oblige

- Advertisement -

- Advertisement -

Planning to buy an electric vehicle? Your net cost may depend on how successful General Motors lobbyists areGM
Toyota, Ford and Chrysler are parent company Stelantis and whether West Virginia Senator Joe Manchin is ready to strike a deal with his fellow Democrats.

- Advertisement -

Back in 2008, in an effort to start the electric car business, Congress created a nonrefundable tax credit of up to $7,500 for eligible vehicles—a credit that (as amended in 2009) was sold by a car manufacturer to 200,000 electric vehicles. After leaving it starts to end. , After a producer hits the initial limit, the credit is reduced to 50% for half a year and then to 75% for the next half year, before completely disappearing.

Total phase-out in late 2019 and hit General Motors in late March 2020. Toyota is expected to soon reach the 200,000 limit, with Over 180,000 eligible vehicles sold by the end of 2021According to research service Bloomberg NEF. Nissan and Ford have sold between 166,000 and 157,000 eligible vehicles by the end of 2021, according to Bloomberg.

But carmakers—or at least most of them anyway—are unwilling to give up that credit crutch. one in Letter To congressional leaders last week, the CEOs of GM, Toyota Motor North America, Ford Motor Co. and Stellantis called for the removal of the per manufacturer cap, setting a sunset date for “a time when the EV market is more mature”. Is performed. This, he argued, would “provide greater consumer choice” and “encourage consumer adoption of electrified options in the future and provide much needed certainty to our customers and home workforce.”

In fact, President Joe Biden’s original, now defunct build-back-better plan would have sweetened the credit substantially—with Union Labor increasing the maximum credit for domestically assembled cars to $4,500. , an additional $500 was tackled for the battery created with the credit. The US bill would also extend the credits for a decade and make them refundable – meaning you can get the credit back in the form of a check from Uncle Sam if you don’t pay income tax. (Currently, the credit can be claimed only to the extent it offsets the income tax liability. With higher costs for electric vehicles, the credit is mainly going to better position.)

Even without the BBB’s passage, the carmakers that signed last week’s letter are still hoping they can at least get the vehicle cap on the current $7,500 credit, while Democrats control Congress.

Tesla CEO Elon Musk isn’t helping the efforts of the four carmakers — at least not directly or publicly. Although Musk had previously advertised the tax credit, when posting on Twitter both $7,500 credit and half $3,750 As credits were about to expire to encourage US buyers to buy their vehicles quickly, last December, anti-union Musk rejected the Democrats’ BBB proposal. And then he went even further. “I’m really saying get rid of all subsidies. But also for oil and gas,” he Told,

Musk complained last week Interview That credit with Club Tesla Owners Silicon Valley now puts Tesla at a disadvantage. “Tesla is currently successful, with our competitors having a materially higher tax advantage than Tesla — despite that, not because of it,” he said. “If you eliminated all EV incentives tomorrow, Tesla’s competitive position would improve significantly. I would say again that if you removed all… the EV tax credits, Tesla’s position would improve immediately.”

While Musk did not sign the letter from other automakers, Tesla is a member of the Zero Emissions Transportation Association, which recently issued a report good Calling for clean energy tax incentives, and has advocated in favor of the consumer EV tax credit, including expanding it to include used vehicles, as well as making it refundable.

With 99 million followers on Twitter, Musk may be the richest and most outspoken person in the world, but he’s not the biggest obstacle in ensuring credit to electric car buyers of the future.

It would arguably be Manchin, the conservative Democrat who stormed the BBB last December and is now alleged conversation With Senate Majority Leader Chuck Schumer (D.N.Y.) for some sort of stripped-down version of the bill that would include energy incentives, as well as some tax increases on the wealthy and some deficit reduction. (All 50 Senate Democrats, including Munchkin, are needed if Democrats want to move through a package without Republican support.)

Biden’s version of the big electric vehicle credit will likely be unlikely, largely because of Manchin’s opposition to the union provision. while munchkin called Bonuses for union-built cars are “wrong” and “we as a country are not,” he has cast doubt on the credit as a whole.

During a Senate budget hearing in April, Munchkin said, “There’s a waiting list for EVs right now with a fuel price of $4. But they still want us to pay $5,000 or $7,000 or $12,000 to buy an electric vehicle.” Give credit.” “It doesn’t make sense. Whatever it is, to me. When we can’t produce enough product for the people who want it and we’re still going to pay them to have it – it’s all in my mind.” Ridiculous.”

The credit has also been criticized by Republicans, primarily for the better off-one function of its current non-refundable nature, as well as the high price of electric cars. Last August, Manchin—along with Sans Kristen Cinemas (D-Ariz.) and Mark Warner (D-Va.)—voted with GOP lawmakers for a non-binding budget amendment that would allow for low-income individuals. EV tax credit for Rs. $100,000 and up for vehicles that cost less than $40,000.

Toyota signing the letter in support of lifting the cap for the current credit could have specifically pointed to Manchin, Rep. Debbie Dingell (D-Mitch). Signal A source familiar with further talks to Reuters told Forbes. Toyota’s only combined engine and transmission plant in North America is in Putnam County, West Virginia. according to company, the plant employs approximately 2,000 people and has “invested more than $10 million in various local philanthropic and educational initiatives over the past two decades.” It is not federated.

Last September, Toyota’s top executives wrote to the Ways and Means Committee objecting to the BBB provisions granting larger credits for electric vehicles made at unionized plants, saying it was “discriminating on the basis of American autoworkers”. Makes the aim of accelerating the deployment of electrified vehicles. Their choice is not to unionize.” He added: “This is unfair, this is wrong, and we ask you to reject this partisan offer.”

munchkin’s office not disclosed Whether he would support tax credits without union incentives, and did not answer questions from Forbes about whether he is in favor of lifting the 200,000 cap.

Automakers, for their part, insist that Despite waiting lists for some electric vehiclesAt least the current credit needs to be extended. A Stelantis spokesperson said the EV market “needs help to reach critical mass” and that “raising the cap is the most expedient means to that end.”

Ed Lewis, director of public policy communications at Toyota, told Forbes in an email that tax incentives for EV customers will help accelerate the transition to an electric future. “As we learned with the Prius, products are only part of the equation,” Lewis said. “We can build great, reliable electric cars – but we need to help customers understand, spend, and ultimately adopt this technology in order to make a real impact. To realize the long-term promise of electric mobility, Toyota supports a broad public policy approach, including tax incentives, which encourage drivers to choose the low-carbon drivetrain that best suits their circumstances.

Benjamin Zeicher, who focuses on energy and environmental policy as a senior fellow at the American Enterprise Institute, points out that automakers with broad product lines (namely not Tesla) need a special approach to keep electric vehicle sales going. Requires “Get the average fuel economy of the fleet” standards at the federal level.” If the credit runs out, he said, they’ll have to “raise the price of conventional vehicles and lower the price of EVs” to meet those goals.

“I understand why they’re arguing [for lifting the cap]but we really shouldn’t have this EV tax credit at all,” Zyker said, adding that if automakers are successful in their effort to lift the cap, “it’s not very realistic” to think that the tax credit didn’t increase. After that again. “What will you do with automakers, there is no cap on the number of vehicles and there is no sunset of EV credit,” he said.

Credit: www.forbes.com /

- Advertisement -

Stay on top - Get the daily news in your inbox

DMCA / Correction Notice

Recent Articles

Related Stories

Stay on top - Get the daily news in your inbox