The heads of the four biggest U.S. automakers have called on leaders in Congress to raise the limit on tax credits for manufacturing electric vehicles and phase it out only when the market has matured.
In a letter dated June 13, the CEOs of General Motors, Ford, Toyota Motor North America, and Chrysler parent Stellantis asked lawmakers to renew the tax credit regime for electric vehicles (EVs). Currently, that system provides EV buyers a credit of $7,500, although it ends when each manufacturer has reached 200,000 vehicles in sales.
The CEOs’ letter was sent to Senate Majority Leader Chuck Schumer, D-NY, and Minority Leader Mitch McConnell, R-Ky, as well as their counterparts in the House of Representatives, Speaker Nancy Pelosi and Rep. Kevin McCarthy, both of California.
Removing the tax credit’s 200,000-vehicle limit on original-equipment manufacturers (OEMs) would give consumers greater choice, the CEOs wrote.
“We ask that the per-OEM cap be removed, with a sunset date set for a time when the EV market is more mature,” their letter read. “Eliminating the cap will incentivize consumer adoption of future electrified options and provide much-needed certainty to our customers and domestic workforce.”
According to company data, GM and Tesla have already run out of credits, and Toyota is approaching the limit. GM cut prices of its Chevrolet Bolt and Bolt electric utility vehicle in early June to remain competitive with EV models from smaller manufacturers.
“Tax credits have proven to be an effective accelerator for EV adoption and we have advocated for a modification to the EV tax credit removing the per-OEM cap,” a spokesperson for GM told Checkpoint. “Clean-energy policies that accelerate the adoption of electric vehicles will establish the U.S. as a global leader in electrification today and into the future, and will encourage investment, growth and job creation.”
Consistent with its efforts to reduce carbon-based emissions, Toyota North America said it supports tax incentives to make EVs more affordable. “Providing incentives to customers of companies that have led the way on electrification will help accelerate America’s transition to an electric future,” the company said in a statement on its website.
Per Code Sec. 30(D), taxpayers receive a credit of up to $7,500 for the purchase of an EV, including passenger cars and light trucks. For a manufacturer, the credit is phased out beginning in the second calendar quarter following the quarter in which it reached the 200,000 threshold in sales.
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