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Thursday, 28 July 2022 15:12

Senate Deal to Expand EV Tax Credits, Income Caps, Price Caps

Written by Steven Loveday, InsideEVs

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In a nutshell, the U.S. Senate's potential EV tax credit would remain at $7,500, though there would be a smaller credit for people who buy a used EV.

The new credit wouldn't be capped, meaning automakers that have had the credit phased out due to sales would be eligible again. The new plan will also have a cap on the price of the EV, as well as the income of the buyer, along with a North American requirement.

 

U.S. Senate Majority Leader Chuck Schumer and Democratic Sen. Joe Manchin have agreed on how to move forward with a new electric car tax credit. Manchin was the person holding up the credit in the past, so his support is paramount in ensuring that the proposal passes.

 

The potential credit will include a new $4,000 credit---30% of the sale price---for people who buy a used electric vehicle. It will also provide other funds and credits to help automakers retool their factories to build greener cars. The bill has $2 billion in cash grants and $20 billion in loans for such purposes, in addition to $30 billion in additional credits to accelerate clean energy production.

 

The current U.S. federal EV tax credit provides up to $7,500 based on the size of a car's battery. All battery-electric cars get the full credit, though most PHEVs just get a portion. The credit was originally capped at 200,000 EVs sold per automaker, so brands that launched EVs early---TeslaGMToyota and soon Nissan---have watched their credits go away. Meanwhile, brands that were late to the game are still benefitting, and many foreign automakers are getting the credit over domestic brands.

 

The new bill would not only remove the 200,000 vehicle cap, but also put a cap in place for the dollar amount of EVs that can benefit from the credit. Electric trucks, vans and SUVs would have an $80,000 cap, and cars would be capped at $55,000.

 

Individuals who make up to $150,000 annually would be eligible for the credit. For couples, the cap would be...


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