There was a time when you could get a $ 7,500 federal tax credit on Tesla and General Motors electric cars. But since both car manufacturers surpassed 200,000 electric vehicle sales in 2019 and 2020, respectively, that credit has disappeared. It could come back, though, thanks to a new bill.
Democratic leaders on the U.S. House of Commons Subcommittee on Roads and Media have supported the Law of growth and renewable energy efficiency now (GREEN), introduced by Rep. Mike Thompson (California), which would make Tesla and GM vehicles eligible again for IRS tax credits and for years to come.
Basically, the bill would allow customers to claim up to $ 7,000 in credit with the purchase of a new electric car, a $ 500 reduction compared to the previous credit. It would now last until the carmaker in question exceeds the 600,000 electric vehicles sold. More critically for Tesla and GM, the law would also reduce their accounts to 200,000, meaning cars that both companies sold after the first 200,000 will not have their 600,000 vehicles.
As with the U.S. Clean Energy and Safety Act (ACES), the credits would be awarded on a variable scale based on technology: all-electric vehicles would receive more than plug-in hybrids, for example. Also, once a manufacturer sells 600,000 eligible cars, its future customers will only be able to claim up to $ 3,500 in credit for the next quarter. After that, the savings would be completely eliminated.
The proposal also provides for provisions for sales of used electric vehicles. Buyers could save up to $ 2,500, as long as the car in question is two or more years old and the sale price is less than $ 25,000. However, eligibility to buy used is related to income and the limit is very low, as indicated in Title IV of the document. invoice states (in bold for me):
The amount that would be allowed … as credit under subsection (a) will be reduced (but not below zero) by $ 250 for every $ 1,000 (or fraction) taxpayer’s adjusted gross income exceeds $ 30,000 (twice that amount in the case of a joint return).
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Of course, we’ve been hearing about The desire of the Biden administration to drive electric vehicles since the election, and the reinstatement of credits can help these cars take to the streets. Or not, given that there is evidence to suggest that most people who buy electric vehicles are wealthy enough to do so, regardless of tax subsidy eligibility.
An effective way the EV credit used, on the other hand, would offer the double advantage of encouraging existing cars to do so stay on the roads and also reduce prices for those who can not afford new electric vehicles, the people who can use the subsidies the most. However, these income requirements could really use another aspect. I would be curious to know how many people earn less than $ 30,000 a year, less adjustments, have never taken into account even the electric vehicles used.
It is worth noting that a previous iteration of the GREEN law could not be passed during the summer, although with a meager democratic majority now, there is more chance that this time it will come true.