A group focused on urging Congress to pass electric-vehicle tax-credit reform launched Nov. 13.
The EV Drive Coalition — made of industry, consumer and environmental stakeholders — aims to reform the federal electric-vehicle tax credit that allows consumers who buy electric cars to receive up to $7,500.
Under the current law, electric-vehicle consumers are eligible for the full tax credit until an automaker sells 200,000 electric cars. Once that cap is reached for any automaker, consumers can receive 50% of the $7,500 federal credit during the first two quarters after the cap was reached, followed by 25% of the credit in the third and fourth quarters. After that, the tax credit is no longer available, according to the Internal Revenue Service.
The coalition wants to lift the current cap on the number of people who can receive this credit through each automaker, according to a news release.
"Arbitrary constraints with the federal credit limit consumer options and make it harder for consumers to purchase the cars they want," Joel Levin, executive director of Plug In America, said in the release. "Lifting the cap would create a more level playing field for all manufacturers, giving consumers the freedom to decide which car they want in a free and fair market. Increased competition spurs more American innovation and technology."
Janet Peace, senior vice president at the Center for Climate and Energy Solutions, said changing the tax-credit rules will have an impact on more than just consumers.
"While a mature EV market will be a boon to the American economy, it will also play a major role in reducing greenhouse gas emissions, a significant contributor to climate change," Peace said in the release. "This would be a win for consumers, for the economy and for the environment."
So far, Tesla Inc. is the only automaker to hit that 200,000 cap and begin phaseout of the tax credit. General Motors Co. is reportedly next in line to hit the sales cap, and although the company declined to provide specific sales numbers, a spokeswoman told S&P Global Market Intelligence that the company expects to reach the cap by the end of 2018. According to numbers compiled by electric-car news site Inside EVs, GM had sold approximately 193,436 electric vehicles as of Sept. 30. GM is followed by Japanese automaker Nissan Motor Co. Ltd. at approximately 124,513 electric-car units and Ford Motor Co. at approximately 110,130, according to Inside EVs.
In Washington, lawmakers are split on how the future of electric-vehicle tax credits should look. Two bills were introduced in the Senate in October that, if passed, would affect the tax credit. One would remove the 200,000 cap but require a phaseout for all automakers in 2022, and the other bill would get rid of the incentive altogether and require electric-vehicle drivers to pay a fee similar to gas and diesel tax paid by drivers of traditional vehicles.
