U.S. Senate bill could give electric car tax credit boost

Tesla Inc and General Motors, that have lobbied Congress to lift a cap on electric vehicles eligible for a $7,500 tax credit, could find their way for up to four years under a new proposition from a Republican senator.

On Thursday, Senator Dean Heller proposed legislation that would lift the present cap on electric vehicles eligible for tax credits. Reuters got a copy of the text of the previously unreported bill, that has not been posted on the Senate website.

Under current law, once a producer hits 200,000 EVs sold, the tax credit phases out beginning in the following quarter. Heller’s bill lifts the individual manufacturer cap but would phase out the credit for the whole industry in 2022.

In previous week, Tesla stated orders for cars placed by Monday would be qualified for a full federal tax credit of $7,500 and these clients will get their cars delivered by the end of the year. Tesla stated in July it had hit the 200,000 vehicle threshold, that under law will lead tax credit being decreased by 50 percent for six months and then slash to $1,875 for another six months until it ends.

General Motors expects to hit the 200,000 threshold by the end of the year.

Both GM and Tesla have lobbied Congress on this, according to federal disclosure reports and discussions with lawmakers. Tesla refused to comment.

GM refused to comment on the Heller bill but stated it is important “to provide a federal tax credit for clients to help make electric vehicles more affordable for all customers.” GM CEO Mary Barra has called for lifting the cap.