Vermont Congressman Peter Welch Discusses Bill To Revise EV Tax Credit

JUL 17 2018 BY TOM MOLOUGHNEY 76

Our friend Alex Guberman over at E for Electric recently scored an interview with Rep. Peter Welch (D-Vt.) to discuss legislation that the Representative introduced two weeks ago.

If Representative Welch is successful at getting this bill (H.R. 6274) passed, it would drastically reshape the EV Federal Tax Credit.

The bill has three main components:

  • First, it eliminates the 200,000 per manufacturer tax credit cap. Instead, it allows manufacturers an unlimited amount of tax credits for the next ten years.
  • Secondly, and just as important, the proposed bill allows buyers to receive the credit as a point-of-sale discount rather than having to wait until they file their annual income tax. In addition to the added benefit of instant savings, this will allow lower-income Americans who don’t have $7,500 in Federal tax liability to also benefit.
  • Finally, the proposed bill adds a tax credit to incentivize the installation of electric vehicle charging stations.

Longtime electric vehicle advocate Chelsea Sexton has been pressing for similar changes to the Federal tax credit for years. In this 2017 blog post, she calls for a number of changes that I wish Rep. Welch had also added to his bill. For instance, a mandate for increased battery sizes.

OEMs are gaming the system by making BEVs and plug-in hybrids that just barely hit the battery size threshold to get the full tax credit. That number should be a moving target and increase over the years. A 16 kWh battery qualifies for the full tax credit, and a 4 kWh battery is the threshold for the minimum amount. Those battery sizes may have been good targets in 2011 when modern EVs began to hit the road in substantial numbers, but they no longer are.

While we fully support this bill, it’s likely going to be an uphill battle. Only last fall, House Republicans proposed the elimination of the EV federal tax credit entirely, so this bill expanding it is surely going to face headwinds in Congress.

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76 Comments on "Vermont Congressman Peter Welch Discusses Bill To Revise EV Tax Credit"

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Let’s see what happens in the upcoming mid-term elections, with control of the House, in November.

No matter what the outcome, I’ll be pulling for Rep. Welch (H.R. 6274), for the Win!

The fossil fuel mafia will fight this to the end, only way to have a chance is to vote in November. CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS thanks co2.earth

As I’ve said before, 0 chance of this bill (or an extension of the current credit program) becoming law as long as Cheeto in Chief is in the White House. Just pipedreams. I feel fortunate I was able to cash in on the credit 6 times.

Bro,
I’m not a Trump fan at all, but I think the ‘Cheeto’ could surprise us all – but only if the Dems become the majority party in Congress and are able to control the legislative agenda. As I see it, the problem is more with Ryan and McConnell. I still have hope – IF the election changes control of Congress.

ONLY way this bill (or any EV credit legislation) has any chance of being signed off by the Orange One (let’s ignore the almost impossible task of such a bill passing both houses) is if he’s convinced it will damage foreign companies/countries while helping US ones (such as GM/ and Tesla).
Literally, GM and Mary Barra are our best bet for getting the EV tax credit extended/revamped. Elon’s too busy fighting the world to help out in any capacity.

You guys need to have a little more respect for the president of our United States. No matter who he or she is.

Yes we need to respect the office but after what he has done to clean air, clean water and this “war on coal” nonsense he obviously has no respect for us

Once the guy in the White House STARTS to have any respect for Americans, we can talk again. So far I only see an angry old man that viciously attacks any American who does not agree with his view of the day …

Respect is a two way road.

Respect is earned, never given. Donald trUMP (DUMP for short) lost all respect when he “assumed some” of 12 million to 20 million illegal immigrants are good people, implying the majority are bad people. And that’s not even considering other douchey things he’s done before and after.

Respect is earned, not bought. Trump gets all the respect he deserves from most of the world’s population.

He bought his all his life, it’s the only way he knows.

Hard to respect someone who accuses, insults and lies.

I can’t think of anything that shows a greater disrespect for the office of the presidency or the country in general than support for the current occupant of the office.

If you had Stalin, Hitler or Mussolini in office, would you respect?

You put that so well that I just archived your comment. Thanks! 🙂

Donald Putin ?

I’ve shown him as much respect as he shows to the rest of the world. Actually, I’ve shown him more since I didn’t use expletives.

bro1999 you’re getting on my good side LOL CONNECT THE DOTS ON CLEAN AIR WAKE UP FOLKS thanks co2.earth

Do you prefer the North Korean model or the old Soviet model for leader worship?

No, no we don’t. The beautiful part of living in America is I can form whatever opinion I want to about the traitor in the executive office, and proclaim it wherever the hell I want. And to those on this website who aren’t American citizens, they CERTAINLY don’t need to show an ounce of respect.

Please contact the current POTUS about respecting the Office of the President of the United States. He is the one who need to show more respect for the Office. Go start with him when it comes to talking about respect for the office.

Respect goes both ways. we are all expecting him to lead by example…lol…like that will ever happen. And no, not all humans need to be respected regardless of their position in society. Check history for plenty of examples.

Gambling casinos, divorces, bankruptcies…it sounds like Biff from Back to the Future II got elected.

Re respect for the President:

In literally any other case I would agree. But I refuse to show respect for any person who has demonstrated such contempt for the Oval Office and for the U.S. Constitution; for someone who actively promotes hatred and divisiveness, rather than even trying to be a real leader. The Wannabe Dictator’s goal is that of a destroyer and a predator, not a builder.

This person did not get the position legitimately; he got it only with the help of Russian troll farms. And he is doing very real damage to the United States every single day he remains in hostile occupation of the White House. The sooner he is removed, by any means possible, the better for everyone — even those who ignore reality so firmly that they still support him.

Personally I think getting a tax credit out to build EV charging stations is more important then giving people money to go buy cars.

Such as if I were working on this bill I would give out $4,000 dollar tax credits to anyone who wants to build home charging stations that are 220 volts and under 25 kilowatts. And $10,000 dollars to any charging station between 25 kilowatts and 50 kilowatts.

But I would give out $25,000 tax credits to people and businesses who put in a minimum 50 kilowatt duel Chamo and CSS charger. I would even give it out to people who put in a Tesla Supercharger as long as it has Chamo and CSS abilities and is open to the public.

In terms of giving out credits to EV’s I would give out $3,000 to any EV with less then 40 kilowatts. And $5,000 to any EV more then 40 kilowatts. But personally I think building charging stations would be far more important then spending money on buying rich people cars.

I am really getting tired of the”rich people’ buying cars claim. I am not rich by any stretch of the imagination. My wife and I work hard, we carry no debt except for our house and the leases on our short range BEVs. These go back in a couple of months which will leave us with a couple of 20 year old motorcycles and a14 year old ICE car. We have been waiting to get a replacement for the ICE car that has a good real world BEV. We aren’t rich, we don’t drink, smoke or waste our money. We save and plan. If we get a tax credit or rebate that helps us buy a cost effective, environmentally effective car so be it. I wouldn’t mind being rich but when you say it like you do you are saying because we are financially wise we shouldn’t get the credit/rebate. As far as chargers how is it that me installing a EVSE in my garage helps anyone in anyway to justify a credit. My car of choice is a Tesla Model 3. Tesla has been installing a charging network without a credit or rebate other than normal business write offs.… Read more »

If you and your wife work hard and have no debt and can’t afford it, doesn’t that make it for the rich? and the fact that you can’t afford it from all of that mean electric cars aren’t economical, or in your terms cost effective.

Not saying your wrong, but giving people tax breaks so they can afford what they otherwise couldn’t is not smart. You do realize without the tax breaks you would have more money instead of enabling others from getting what they couldn’t have. In this case an electric car.

This is not about getting some kind of luxury they couldn’t otherwise afford; it’s about getting an EV *instead* of some stinky combustion car.

EVs aren’t “rich people cars” any more than *any* car is. You could argue that the money should go into public transport instead; but arguing that it should go into charging infrastructure rather than cars makes little sense. Both sever the same purpose and the same buyers.

How about a rebate or subsidies for charging station for and hone stations $2000

(⌐■_■) Trollnonymous

They’re going about this all wrong!

Level the playing field, remove the EV rebates and remove the Petrol subsidies!!!!
https://en.wikipedia.org/wiki/Energy_subsidies

You do realize that is equivalent to tax increase. They’re not going to lower your taxes in other ways. They’ll simply spend more of it most likely in making more wars and killing people. Tax increase is evil, and I don’t trust DUMP with more of my money.

Granted, petrol subsidies are idiotic (lower tax for oil companies, higher tax for consumers), but EV subsidies benefit the consumers at large by cutting taxes as well as cleaner air in urban areas where people live.

If anything, I’d like to see more EV tax cut that rolls over to following years such that even low income people can enjoy the benefits of EV without indirect means via used cars.

Tariffs are taxes. Imposing Tariffs are tax increases. I don’t see enacting massive tax increases slowing down the current POTUS.

Cutting income taxes was just lipstick to hide how much tariffs would increase taxes, the majority of which would be passed through to consumers.

I know, right? Republicans are suppose to be about lower taxes, but DUMP and his ilk are Republiturds! And those who don’t voice strong opposition are Republitards.

Some say the money from a carbon tax should be used to lower other taxes instead (revenue-neutral); others say it should go towards environmental purposes. Some say it should be a little of both.

Either way, it’s just shifting around funds. Taxing things which are harmful, while supporting things that are good. That’s the basis for any reasonable tax policy.

Carbon tax have been eliminated

Won’t happen. Movement on any legislation is going to be difficult over the next few months. They will be lucky to double the sales cap and double the battery size requirements. But I’m totally in favor of armed men NOT stealing the fruit of my labor to spend on things like murdering children overseas, so I’ll hope for the best- but I place no faith in government on this or anything else.

-“Secondly, and just as important, the proposed bill allows buyers to receive the credit as a point-of-sale discount rather than having to wait until they file their annual income tax. In addition to the added benefit of instant savings, this will allow lower-income Americans who don’t have $7,500 in Federal tax liability to also benefit.”-

If they give out $7500 instantly at the dealership and people that have no tax liability can benefit, then it is no longer a tax credit. It is a rebate. The difference is public tax funds would be sent to buyers vs. buyers just getting to keep their own money. This part of the bill is a non starter for conservatives. In addition, rebates are taxable income, so depending on the consumer’s income situation, they would not actually get the entire benefit of $7500. They would only get $7500 minus whatever in taxes they would owe depending on tax bracket.

I don’t think CA EV rebate is taxable.

I don’t think poor people who don’t have any tax liability and won’t pay any tax in future will be able to buy brand new EV. In practice, people who benefit from point of sale “rebate” would be tax payers. Advantage for POS rebate is that those who pay little in taxes currently who can afford $30K car would benefit by effectively having their future tax bill reduced. (eg. fresh grad from engineering school and retirees).

You are correct. There are two reasons the Fed tax incentive was done as a credit:

1) A point of purchase price reduction would also reduce how much states collect in sales tax. That is considered an “Unfunded Mandate” on the states, and would violate current budget rules unless Congress added a line-item in the budget to repay the state and local gov’ts for their lost tax revenues.

2) A point of purchase price reduction would have to come as a payment to the car companies making the sale. That means Congress would have to create another line-item of spending and add the program onto the spending side of the budget. Currently the credit is on the income side of tax regulations, and does not have to be accounted for on the spending side.

“This part of the bill is a non starter for conservatives. ”
I’m in no way a conservative and i’m against this. This is too much of a giveaway. Make it 7500 tax credit or a 3000 point of sale gift.

Let’s limit it to EVs that sell for $35k or less, of course NOT including the extra (tax, license, doc. fees, registration, and the Stealership delivery & prep. bogus Mumbo Jumbo).

This will make the manufacturers get the price down for the mass adoption of EVs.

Or the manufacturers will just not make them or delay projects claiming no profitability at that price point. Not a fan of your proposition.

This is a crazy generous tax credit. Remember it was supposed to help the EV sector to get going. These incentives are a gift from the rest of the taxpayers to the EV buyers. By all means make it equal for all manufacturers to a date certain, and then phase out fairly slowly but ten years is too long for this taxpayer. Maybe full credit to 12/31/19 and then a slow (25% per year phase out.

The real environmental issue is the reduction of greenhouse gas emissions and the cost per ton (or pick your unit) to do this. EVs are not very cost effective at this compared to many other measures. As always, the best solution is a (mostly refunded) carbon tax to push people to make sound (better for the whole of us) decisions, But we all like givaways (to ourselves) better.

“The real environmental issue ”

That’s pretty funny. Hardly anyone cares about the environment. Just ask all those around you stuck in traffic in their giant SUV and driving solo. Tax cut for EV runs far deeper, 1) it’s a tax cut, 2) it promotes American product, 3) less money going to DUMP administration.

I agree it is too generous for a 10 year span. It should be indexed to battery prices somehow, or some other method of reduction in dollar value over time. It has to be a credit to help bridge part of the gap while EV prices come down and not a penny more. That’s hard to put into law though. Especially when you know future Congresses can’t just function like normal people and make any minor fixes that are required along the way to make it work.

The core reason for broken regulations in the US is refusing to make common sense fixes and instead having petty brinkmanship over whether regulations should exist at all, where minor fixes are blown into existential battles.

While I don’t have numbers at hand to back it up, I’m pretty sure EVs are among the more cost effective methods to reduce greenhouse gas emissions. Probably cheaper than retrofitting houses for better energy efficiency, completely overhauling agriculture, etc.

Of course, in the end *all* these measures will have to be implemented in the not-too-distant future…

No you will see no fords or Chrysler EVs

“lower-income Americans who don’t have $7,500 in Federal tax liability to also benefit.”

Maybe, but the benefit would still go towards middle income Americans instead of lower income. I suppose it comes down to how you define “lower”.

I hate to say it, but lower income Americans cannot afford to buy brand new cars. Not ICE cars, not EV’s. Insurance is too high. Depreciation (even after accounting for tax incentives) is too high for new cars. Yearly registration fees are too high.

The way to help TRUE low income Americans would be a tax incentive for buying or owning a used EV. Otherwise, everyone getting a new EV can lease and get most of the tax credit.

One good thing about upper income families buying or leasing EV’s is that it puts them on the road. When the lease runs out or they decide to get a new one, it is a used EV that I can afford. Middle and lower income families can afford used EV’s

Yes, buying used is a great way to get that $7500 tax incentive passed on to you.

If someone really feels mad about rich folk getting the $7,500 tax credit, the fix is to go buy some rich guy’s used EV at current used EV prices. That way anybody can pocket that $7500 tax credit for themselves as it gets passed on in the form of a lower used car price.

Not mad but it feels condescending.

Or, do like California has done and put an upper income limit on the incentive.

What? I make $32K and my partner makes $65K. Me being Single don’t make enough to get the $7500 credit but I can get any car up $50k if I wanted to because I got great credit and I can afford making $700 payments. I have a 1 gen Volt just waiting for it to crap out to make my next purchase

I feel like pushing it out to 2028 is asking for way too much… but perhaps they’re expecting the Republicans to trim the bill back before attempting to pass it? Ask for 2028, and be happy with an end date of 2023?

Also, why not taper it off? $7500 for 2018 & 2019, $5000 for 2020 & 2021, $2500 for 2022 & 2023, then drop it off at that point? Surely EVs will be on par price-wise with their gasoline counterparts by the end of 2023?

I don’t think it’s a great plan at all. If the credits are going to be unlimited, then it’s really imperative that the amount decreases over time. Either reduce it $750 each year starting in 2019 or start in 2021 and reduce it by $1500 each year (with perhaps $750 each for the last two years). Perhaps even structure it to advantage vehicles assembled in the US with US content. As for the credit, make it refundable and more importantly, able to be used over multiple tax years going forward so that people can take advantage of the full credit even if they don’t have the entire liability in a single year.

Just allowing the tax credit to carry over for just 1 year (2 years total) would help greatly. That would make it so the vast majority of people could take the full tax credit. Or at least the vast majority of people who can actually afford to buy and own a brand new car in the first place (ICE or EV).

Getting a bunch of EV’s on the road does no good if people can’t afford to pay taxes, insurance, and car payments on them and they get repo’ed. The last thing EV’s need is a PR disaster where along with every EV fire getting reported in the press as if it were news, that we also get every EV repo reported in the news that leaves a low-income family without a car.

Even if they get repo’d, they’re still heading back to the market as “certified pre-owned” vehicles and so those prices will reflect that.

“…it allows manufacturers an unlimited amount of tax credits for the next ten years.”

So if in the 10th year, there are 10 Million EVs sold, where would the $75 Billion come from to fund this?

We all like paying less but that question needs to be answered.

Yes, that’s why it should include a scheduled decline in the amount of the credit each year.

Its time to get rid of all the subsidies for electric vehicles, renewable energy and also fossil fuels.
Global warming is alarming and the best way to cut is thru conservation.
Subsidizing an $75,000 Tesla vehicle is certainly not the right way.
If all energy related subsidies are cut, then people will stop wasting the energy.

China is going bit on cutting subsidies for both Solar & Electric vehicles.

“No matter what the outcome, I’ll be pulling for Rep. Welch (H.R. 6274), for the Win!”

Elon Musk is financing Welch’s GOP challenger who claims climate science doesn’t exist.

https://thinkprogress.org/elon-musk-house-gop-contributions-ed4cfe71c22c/

He is actually donating to both R’s and D’s just like GM and Google and other businesses. I documented this previously, but like a good little troll you are ignoring facts and regurgitating the bullpucky.

Let’s do a rational thinker test. Yes or no, do you understand that if US companies want politicians to answer the phone when they call, that those companies have to answer the phone when politicians FROM BOTH PARTIES call for donations?

That’s why lobbyists (some of the most well paid (Non Politicians) in Washington D.C.), are always lobbying both sides of the isle.

The 535 mouths that are feeding in the trough, don’t really care which side (left or right) shovels in the next tranche of treats!

I know the Not so Saintly, St. Elon, is among the top 50 GOP contributors, in helping keep the Red teams existing hold on the House majority, coming up in this midterm election.,

Maybe Musk is hedging his bets, like many with deep pockets and Wall St. Capital Connections, in Washington D.C.

Politically brain dead to propose this. Never going anywhere. They have to appeal to the republicans by saying that it makes zero sense to subsidize German and Japanese auto companies that have not built enough EVs to run out of the credits while two all American companies (GM and Tesla) are cut off.

Instead they should propose to keep the credits the same but put them all in a big pool that any manifacturer can access. So if GM or Tesla sells vehicles they just take a credit from the others. No additional financial commitment while continuing to incentivize rather than punish the first movers

Makes total sense, so Trump will Veto.

The last paragraph of this article really says everything that’s important:

“While we fully support this bill, it’s likely going to be an uphill battle. Only last fall, House Republicans proposed the elimination of the EV federal tax credit entirely, so this bill expanding it is surely going to face headwinds in Congress.”

Maybe it can pass after the Democrats win a majority in the midterms in at least the House… and we can hope for a “Hail Mary” attempt at control of the Senate!

I don’t think the Cheeto-in-Chief would necessarily automatically veto such a bill. Give the Devil his due (in this case, almost literally); the Wannabe Dictator has shown himself to be willing to make a deal, even if his hard-line supporters are not.

Chelsea is right, the credit should be proportional to pack size, with a minimum of 10 kWh to qualify and the max credit starting at 60 kWh. Give PHEV’s with 12 kWh packs 12/60 of the full credit.
But 10 years is too long. Start winding it down for all BEV/PHEV makers in 4 years, half credit from 4-6 years and quarter credit in years 6-8. And it doesn’t have to be $7500. $5000 would probably work just as well now that pack prices have fallen as much as they have.
This won’t pass in today’s environment, but it is nice to dream.

DOA

Vote in November and get rid of Russia loving GOP

I wish he were serious about this instead of just doing election year grandstanding. If he were serious he would find a Republican cosponsor and he would make the bill more realistic. Ten years is far to long for this subsidy, it should be five years with a phase out starting at year 3. The current law which favors Toyota over GM makes no sense, better they should just eliminate the tax credit altogether. But if you want minimal disruption in the market the credii should be phased out, thus five years with phase out starting in year 3.