U.S. Lawmakers Propose To Extend EV Tax Credit At A Cost Of $11.4 Billion

A range of U.S. lawmakers have introduced legislation proposing to expand the state ’s national electric car tax credit for an additional 400,000 EVs offered by car manufacturers.

Under present regulations, buyers may benefit from a $7,500 federal tax credit for the initial 200,000 EVs a car manufacturer sells at the U.S.. The tax credit is phased out over a period of 15 months, After that amount is reached.

The new bill, dubbed the ‘Driving America Forward Act’ and sponsored by the likes of Democratic Senators Debbie Stabenow and Gary Peters, would grant automobile makers a $7,000 tax credit for an additional 400,000 vehicles built in addition to the 200,000 already qualified for a $7,500 credit. The bill proposes to shorten the phase-out program to nine months and has been been sponsored by Republic Senators Lamar Alexander and Susan Collins in addition to Democratic Representative Dan Kildee.

The proposal clashes with White House plans

Moreover, the bill would expand the hydrogen fuel cell credit through to 2028 and is estimated to cost $11.4 billion. All but $91 million of this figure would be used to prolong the EV tax credit.

Reuters reports that the bill has the backing of several automobile manufacturers and environmental groups. However, many lawmakers are expected to oppose the bill, especially since the White House last month suggested to instantly scrap the $7500 federal tax credit in a move that would reportedly save the government $2.5 billion over a decade.

Businesses including GM, Tesla, Toyota, Ford, FCA, Honda, BMW, Nissan, and Volkswagen AG have all backed the bill.

Tesla was the first company in the United States to have its federal tax credit cut from $7,500 to $3,750 on January 1. GM’s tax credit was also halved on April 1.

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