GM, Toyota, Ford, Stellantis Urge For $7,500 EV Tax Credit Cap To Be Dropped
A number of car manufacturers are urging Congress to lift its cap on the $7,500 electric vehicle tax credit.
The letter from the chief executives of General Motors, Ford, Stellantis, and Toyota North America asked congress to abolish the current cap which means the $7,500 tax credit is phased out once a manufacturer sells more than 200,000 EVs. Mary Barra, Jim Farley, Carlos Tavares, and Tetsuo Ogawa said the rising costs of cars make the credit all the more important.
“We ask that the per-(automaker) cap be removed, with a sunset date set for a time when the EV market is more mature,” the letter reads. “Recent economic pressures and supply chain constraints are increasing the cost of manufacturing electrified vehicles which, in turn, puts pressure on the price to consumers.”
President Joe Biden has previously proposed raising the EV tax credit up to $12,500, but the provision that only vehicles made at union sites in the U.S. would benefit from a $4,500 incentive caused controversy. The President has also supported a 30 per cent credit for commercial electric vehicles, as well as a $4,000 tax credit for used EVs.
Not all Democrats are supportive of extending the tax credit. For example, West Virginia Senator Joe Manchin says it simply makes no sense.
“There’s a waiting list for EVs right now with the fuel price at $4,” he said in April. “But they still want us to throw $5,000 or $7,000 or $12,000 credit to buy electric vehicles. It makes no sense to me whatsoever. When we can’t produce enough product for the people that want it and we’re still going to pay them to take it — it’s absolutely ludicrous in my mind.”
Tesla and General Motors have already hit the 200,000 mark and their vehicles are no longer available with the full $7,500 tax credit. Both Ford and Toyota are expected to hit the 200,000 mark this year, Auto News reports.