The U.S. Democrats are proposing to expand tax credits to favor the big 3

Friday, U.S. lawmakers officially proposed a significant extension of the current tax credits for electric vehicles that would greatly favor union-manufactured vehicles that produce zero emissions and are mounted in America. It is important to note the fact that this does not imply a reduction in tax credits for other non-American vehicles.

The current tax credit for zero-Emission vehicles are $ 7,500, and that will remain unchanged. However, U.S. union-made vehicles will get a $ 12,500 tax credit.

All of this is part of President Joe Biden’s seemingly high goal of securing half of electric vehicle sales in the U.S. by 2030 they will be American-made vehicles. With this proposal, the United States could also see more critical union-based jobs being introduced to revitalize the positions of the three major automakers.

There are some other things this proposal does and does not include:

• The bill yes with the phasing out of car manufacturers ’tax credits after selling 200,000 electric models. This would make Tesla and General Motors eligible for tax credits again.
• Used electric vehicles will include a $ 2,500 tax credit, which is only eligible for vehicles over two years old and less expensive than $ 25,000, as long as your individual income is $ 75,000 or your family income is $ 150,000.
• There is a $ 4,000 tax credit for all electric vehicles. You will receive an additional one $ 3,500 discount if the EV has a battery of at least 40 kWh. There is another $ 4,500 if the final assembly takes place at a unionized national plant and $ 500 if at least 50% of the battery components and cells are manufactured in the US.
• The tax credit has income restrictions. If you earn $ 400,000 per person alone or $ 800,000 in a relationship, you will not be able to get the discount.
• There are also restrictions on vehicle PVPs. Anything more expensive than the following will not be eligible: $ 55,000 for sedans, $ 64,000 for vans, $ 69,000 for all-terrain vehicles, and $ 74,000 for vans.
• Funds will be allocated to charge the infrastructure as long as that infrastructure is available to the public, is capable of charging vehicles manufactured by more than one manufacturer, and can be paid for by credit card.
• The bill would come into force in 2022.

Of course, it is important to remember that these are tax credits, no immediate discounts at the point of sale. Therefore, you will still pay the original price of your electric vehicle when you purchase it and will have to wait for a tax rebate during the tax season.

It is also important to note that this is only a proposal and is still subject to legislative criticism.