GM, Tesla, Nissan & Others Form Coalition To Reform EV Tax Credit

NOV 13 2018 BY DOMENICK YONEY 66

Come together, right now, for EVs.

Getting the various manufacturers of electric vehicles to agree on something has, in the past, been challenging. A single high-speed charging standard springs to mind. Now, though, it seems there has been a joining of hands on the issue of the federal tax credit. Tesla, GM, Nissan, and a number of other companies and organizations have come together to form the EV Drive Coalition in an effort to reform the electric vehicle tax credit program.

Started when President George W. Bush signed the Energy Improvement and Extension Act of 2008 into law (as part of the more sweeping Emergency Economic Stabilization Act of 2008)the legislation currently gives electric vehicle buyers a tax credit of $7,500. After a manufacturer sells 200,000 vehicles eligible for the program, a phase-out stage reduces the credit amount by half, and then half again, before finally ending altogether.

Tesla has now reached that 200,000-vehicle threshold, and GM is quickly approaching it. To help electric vehicle uptake keep (and hopefully improve) its momentum, the program needs some changes. This is, as you probably have imagined, where the EV Drive Coalition comes in.

According to a press release (below, in full) issued today by the new group, it wants to build on the success of the program by removing the 200,000-vehicle cap. We, of course, wish them good luck with their mission. And while we wonder just what kind of reception the effort will receive from the current Congress, we know there are at least some elected officials they should be able to get on their side.

 

EV DRIVE COALITION LAUNCHES TO REFORM & RECHARGE
ELECTRIC VEHICLE TAX CREDIT
Urges Congress to pass electric vehicle tax credit reform

Washington, D.C. (November 13, 2018) – The EV Drive Coalition, a broad coalition with a
focused goal to reform the federal electric vehicle (EV) tax credit, today announced its official
launch as Congress convenes for its lame duck session. The EV Drive Coalition brings together
a diverse group of industry, consumer and environmental stakeholders with a single unifying
mission: encourage passage of legislation reforming the federal electric vehicle tax credit to
ensure that it works better for more consumers for a longer time frame and spurs increased
growth of the U.S. EV market.

The original electric vehicle tax credit, which goes directly to consumers not manufacturers,
catalyzed the market, increased consumer awareness and grew a nascent industry. To promote
continued market growth and stabilization, members of the EV Drive Coalition are advocating
for reform to lift the current cap on the number of consumers who can take advantage of the
credit through each manufacturer.

“Arbitrary constraints with the federal credit limit consumer options and make it harder for
consumers to purchase the cars they want,” explains Joel Levin, Executive Director of Plug In
America. “Lifting the cap would create a more level playing field for all manufacturers, giving
consumers the freedom to decide which car they want in a free and fair market. Increased
competition spurs more American innovation and technology”

“A federal tax credit to help make electric vehicles more affordable for all consumers is integral
to reaching a zero emissions future and establishing the U.S. as the leader in electrification,”
said Dan Turton, Vice President, Public Policy at General Motors North America. “We feel that
the tax credit should be modified so all customers continue to receive the full benefit going
forward.”

“A reformed tax credit will affect more than those who purchase electric vehicles,” reassured
Janet Peace, Senior Vice President at Center for Climate and Energy Solutions. “While a
mature EV market will be a boon to the American economy, it will also play a major role in
reducing greenhouse gas emissions, a significant contributor to climate change. This would be a
win for consumers, for the economy and the for environment.”

“We’ve been able to make tremendous strides in the underlying technology of electric vehicles.
The battery power and the range have improved significantly over the last few years. With every
new advancement, we get closer to becoming an economically sustainable market. However,
we’re not there yet, and keeping the cap will have a negative impact on a sustainable U.S.
electric vehicle market,” explained coalition spokesperson Trevor Francis.

This is an urgent issue. Choosing not to reform the tax credit will severely hinder America’s
ability to compete in a global market. “At that point, it wouldn’t be just an automotive issue. As it
stands now, electric vehicles are responsible for nearly 300,000 jobs. This is a jobs issue and
an economic issue in addition to a consumer issue,” emphasized Francis.

A reformed electric vehicle tax credit will ensure the domestic manufacturing, infrastructure and
market of electric vehicles continues to grow. Electric vehicles are the way forward and the EV
Drive Coalition will work to ensure a flourishing, mature and cost-competitive U.S. EV market.
To learn more about the coalition, its members, its mission and the proposed legislation, visit
www.evdrivecoalition.com/home.

Categories: Ford, Nissan, Tesla

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66 Comments on "GM, Tesla, Nissan & Others Form Coalition To Reform EV Tax Credit"

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Noticeably absent are those vehicle manufactures that dragged their feet to bring an EV to market, and now want to have a competitive advantage.

I noticed the same thing, and wouldn’t be surprised of those laggards actually lobby against this.

What are you guys talking about? Laggards? Dragging feet?

The Chevy volt, a lowered cost family car, was out 2 years prior to Tesla’s family car, and you could buy 2 volts for the price of 1 Tesla.

Nissan also Beat Tesla to market with a practical family sedan – and, sorry to say, it took Tesla FOREVER to come out with the Model 3 – their first semi-low-cost car. You can still buy 2 low priced ev’s (when you figure in the credits) for the price of ONE model 3

Unless you mean the companies of late. 9 years ago, these big corporations were not dragging their feet.

But with GM’s statement that they won’t ever make plug-in trucks seems to indicate they are now changing from progressive companies to dragging their feet. In that sense I see what you mean.

How far is Nissan from losing credit, still a ways to go right?

At the current sale pace….they are fine….lol.

Interesting that they cite this website’s numbers on their page. Pretty impressive that the auto companies are citing you!

Talking about Tesla? IIRC they are forced to as part of the legislation surrounding the credits.

There has to be some sunset for the program; 200,000 per manufacturer is clearly suboptimal but a national limit or sunset date is necessary, and I don’t see them proposing one.

I agree…a national limit is far better than per manufacturer, but no limit is tough for the federal budget folks to forecast revenues, if anyone still cares about pretending we cate aboit balances budgets.

The current model isn’t terribly good in terms of forecasting either, though… Due to the nature of the Model 3 ramp, Tesla buyers will actually get more in cumulative credits during the 1 1/2 years sunset phase after the 200,000 threshold was hit, than during the several years before that…

I would say make it 7k next year and drop it 1k per year till it is 0…
And an instant credit at the dealer…

Just fund it with a carbon tax…

Whatever the rule, it obviously shouldn’t disadvantage successful domestic manufacturers.

Should have done this a year ago, but better late than never.

If VW will make 50 mil ev in the next few seconds why are they not joining in?

HAHAHAHAHAHA! Love it!

VW “Not Joining in”, is probably because they have to actually be “invited” across the threshold, to enter the EV Drive Coalition, like a V(W)ampire, when coming in from the outside, and entering the victim’s abode.

https://repository.ntu.edu.sg/handle/10356/59298

Next few seconds, lol.

In the crazy theoretical if that were true, then wanting an EV tax credit extension or not would depend on how quickly they could sell them.

Obviously the 50 million was over the life of VW Group’s MEB platform.

I’d rather see the subsidies scrapped and replaced with a CO2 tax (all sectors, not just transport fuels), with a corresponding levy on imports from any country that doesn’t have the same. But that ain’t gonna happen anytime soon here in the USA. Carbon tax gets to the root of the problem. EV subsidies have an indirect effect on the problem.

I did a personal carbon audit, and 75% of my footprint comes from non-transport consumption (owning a home, buying stuff, eating, etc). My electric utility is 100% hydro. We own 1 small commercial vehicle, and 1 hybrid SUV, so not even on electric. Rather surprising results, and shows the limits of just focusing on EVs. Going to a carbon tax cleans up the whole mess, and keeps things simple.

In the absence of my dream scenario, make this EV credit a revenue neutral proposal relative to the current plan over the next few years. Say cap the entire program at 1m vehicles, with a 24 month phase down once that # is hit. No limits per specific manufacturer, that way we’re supporting the innovators and not the laggards.

Unfortunately, even in lefty Washington state, the revenue neutral ballot version went down hard two years ago, and this year a “give all the money to good green causes ” went down too, though not quite as hard.
Politics of this are not there…yet. Though it’s a great goal to strive for.

Yeah, I’m in WA. The ballot measure a few years ago was a good one, that as you said, went down in flames. The current one, 1631, was far from perfect, and got some (unfairly) bad press from a few influencers, including a climate professor/blogger who seems to have gone a bit nutty due to a bruised ego.

A CO2 tax at a state level is a problem. It puts your manufacturing sector at a competitive disadvantage, and leveling this out gets muddy. It needs to be national, and I really think pairing it with a tariff on imports would offset any manufacturing disadvantages to the domestic factories, and also throw some red meat to the populists to gin up political support.

Each state isn’t a “China” of sorts, though. A carbon tax works better at the state level, precisely because it is the majority of states that do not have the dislocating impacts one would have on, for instance, fossil fuel production. Few do that, and unless big oil carpet bags your state, you have good odds of passing some kind of a CO2 price. The effects are smaller, and many would say desirable, on carbon intense manufacturing.

Amazing how many “no” votes the $30 million from oil companies were able to buy.

You describe close to what we had in Ontario, then New Premiere Doug Ford Cancelled it!

If you think carbon tax will be spent to reduce CO2, you are naive like a 10 year old kid. Just look at what we elected as head of executive branch. Most likely, carbon tax will be diverted to fund some crooked politicians and friends, just like everything else earmarked (aka, pork projects).

The point of C02 tax is to make it more expensive to pollute, thus creating an economic incentive to reduce the release of C02 into the atmosphere. This is really basic Econ101.

It’s infantile to think that politicians will be so noble as to leave that be. Take a look at gas tax. They tax the consumption side and at the same time give subsidy to oil industry.

You can be 100% sure they will do something like it with carbon tax to benefit their buddies while punishing the consumers. End effect will be like gas tax; not much change other than enriching the politically connected.

The incentive program cannot continue infinitely. It has to end at some point in time. Therefore, simply pick a date (when the incentive program should end for all car manufacturers at the same time. How about 01-01-2025?

I think it should come off the price of the car at the dealer. That way everyone can get a credit not just the people who make more than 55,000 a year. The commercials make it sound like it comes right off and don’t explain how it works like trever from model 3 owners club or Ben sullins did on their channels .

If they really wanted to Spur the race they would’ve placed a cap to be reached by ANYONE then a slow phase out for ALL

1,000,000 total combined vehicles then a yearly phase out for all at the same time. Sell more cars, get more of the credit. Drag your feet and get left behind.

I think it’ll happen. Good way to support a few domestics and stick it to VAG, which politicians of all stripes should be able to get behind.

Frame it as a vindictive, punishing thing, and our current politicos might go for it.

1,000,000 is not enough. Currently, their are about 17 manufacturers per the IRS definition. That’s 3.4million cars that will qualify for the full $7,500 at a minimum. And if automakers are smart, like Tesla was, then they could potentially get another 100,000 vehicles each at $7,500. And 100,000 at $3750, and 100,000 at $1875. So if it’s going to be a hard number for all automakers, make it about 10million.

Tesla, GM and Nissan are the only 3 companies that have taken the PEVs seriously. Therefore, they are the one that is most deserving of our support and a change in EV incentives.

Yet, GM and Nissan to some extent has been getting a lot of hates from EV community while the rest of major automakers have gotten a major pass…

GM gets hate for producing a good car, but only in numbers to ensure they can continue polluting with the rest of their fleet (as Musk predicted).
Nissan gets hate because the LEAF is not as great as Tesla, but then again was never meant to be, so that IS somewhat undeserved.
Ford deserves a lot of derision, and don’t get people started on criminal cheaters like (coughVWcough) you know who.😊

GM originally planned to make a lot more Volts (and Amperas), but was forced to reduce their production numbers to what they could actually sell.

You might be able to make the scarcity argument in Canada, Korea, or Europe, but you DEFINITELY can’t make it in the US. There are more than enough Bolts and Volts for anyone in America who wants one, and if GM were to ever limit US availability – even temporarily – so they can ship more EVs overseas, people here would be screaming bloody murder and invoking the EV1.

GM could have produced more EVs and actually moved them to where there is a market demand (or build them there) in Europe or Asia. That they didn’t means that they had no intention to build any more than compliance numbers in the US market, hence the well deserved hate.

How is it “compliance numbers in the US market” when there are plenty of them available to buy in all 50 states? Anyone who wants one can buy one. That’s not “compliance numbers.”

I mean, GM isn’t even in Europe anymore and people are still bashing them for not selling enough EVs there.

” they had no intention to build any more than compliance numbers in the US market,”

Please stop spreading this BS claims. GM has sold FAR MORE Bolt than it will ever need for compliance reasons.

If you have facts to back up this claim, I am more than glad to hear it. But most of those so called facts are nothing more than someone’s opinion. In fact, the most “credible” analysis shows that it is MORE than ZEV compliance requirement. GM doesn’t need to sell nearly as many Bolt for compliance reasons. But if we add the CAFE numbers which helps GM’s overall fleet CAFE requirement, then that is plausible. That is a different set of requirement which isn’t necessarily compliance as GM can meet that with other type of vehicles, not necessarily a 238 miles BEV.

Yet GM is right behind Tesla for the number of PHEV/EV sold in the US.

That used to be true, until Model 3 started ramping. Now the gap is widening significantly with every passing month.

Doesn’t matter how much it is widening, the fact remains that GM is the solid #2 PEV maker in the US. Nobody else is even close to passing GM at the #2 position.

Could sell it to the MAGA crowd by making calling it the America First Jobs bill. Only EVs made in the US would qualify. Extra credit for EVs with battery packs assembled in the US, extra credit for using cells made in the US, extra credit for EVs that can use CCS public infrastructure, incentives to charging providers to build out infrastructure.

We have trade agreements that keeps us from enforcing laws like that. We would have to withdraw from pretty much every major trade agreement we have with EU/Pac Rim nations.

MAGA followers don’t really care where there cars are made as long as they are good quality and low price lol my 2016 leaf is at the dealer for 12 volt battery issues and I’m driving a 2018 nissan sentra loaner with a sticker on the windshield that states that 60% of the vehicle is made in Mexico lol I live in a majority MAGA Polk county Florida

They will when Trump brings it up, heck it can be anything after he grinds it through his word salad.

Yes the subsidies is backwards. The company that made the most and best should get the subsidies the longest. They should be stopped for the small compliance makers that never made more than 1,000 a month. In fact Honda just made 1,100 of the FIT EV which was the very minimum . They should be fined.

That would only punish potential EV buyers, and the not help with transitioning.

The idea of the current laws is much like the CARB laws. They both recognize the reality that smaller volume car companies WILL be laggards because they have to wait until much of the new technology is available as off-the-shelf parts from suppliers, because they simply can’t financially survive otherwise.

What is going on now with incentives though is particularly nasty. Because we are seeing HIGH volume car makers like Honda and Ford acting like low volume car makers like Mitsubishi and Subaru and not building tons of EV’s. Those are the companies that need to be wacked on the back of their heads. Incentive programs that were designed to keep the EV revolution from putting small car makers out of business have instead been distorted to allow high volume car makers to drag their feet and maximize their profits as a reward for dragging their feet.

We need to allow small car makers the room to stay successful through the EV transition, while still holding large car company’s feet to the fire.

they should ask for bigger incentive like $10K up to 200K cars. And $5K from 200K to 250K cars.

A new law should have these qualities:

1) A lower top incentive value that reflects the reality that battery prices HAVE come down.
2) A higher minimum kWh size for incentive, reflecting real trends in battery size getting bigger. No incentive under, say, 10 kWh or so.
3) A predictable and much slower stepped sunset of the incentive. It should be reduced no faster than 25% per year, and only drop once a year, and should be tied somehow to battery price and/or sales numbers.
4) Sliding scale reduction of incentive for higher priced EV’s/PHEV’s. At one point the only long distance interstate worthy EV’s were over $60K-70K, this is no longer true.

I think part of the problem is that due to the costs of current BEV tech relative to ICE tech, a (non-loss-leader) 200+ mile BEV is either going to be very expensive, or not particularly sexy.

One of the questions that we, as EV advocates, need to ask is: do we want EVs to be prestige vehicles? Should the EV revolution primarily belong to companies like Tesla, Jaguar, and Porsche? It certainly seems like there is higher potential for EV sales in the luxury market than in the economy sedan market.

Name any technological advancement ic cars and it started first in higher trim and badge of cars. Like an MB 500 type of car. Then worked into lower level cars over time.

EVs are not immune from that reality

We are at the point that Acura and Buick and other Mid level badges should be join ing

You’re about 5 years behind the times – the Model S has been making money since mid-late 2013, and the Model X is making money now that it’s up to steady-state production.

On point #2, it should be miles of electric range, not battery size. The CARB rules that penalize REX like the i3 seem counter productive as well, but that’s another topic. Once a car has 50 miles of range, the environmental benefit is pretty much optimized.

I’d make the argument that a Volt or an i3 Rex with 100 miles of battery range is a much greener vehicle that a Model S 100. But really our goal should be to get anyone and everyone into a car with 20+ miles EV range. Do that in the short term and we’re starting to win the war, not just the battle.

I agree completely with every word of your post and I plan to steal from it for my #2. *grin*

Just for the record, the CARB rules do not “penalize” the i3 REx. Rather, the opposite: BMW specifically lobbied CARB for a set of rules that would treat an EREV (like the i3 REx) as equivalent to a full BEV for the purposes of ZEV manufacturer credits, as long as there are significant restrictions on the operations of the gas engine. So from BMW’s perspective, it’s not a penalty, it’s a benefit.

It bears mentioning here that GM certainly has enough regulatory clout to have lobbied for similar rules for the Volt, but chose not to do so. I leave it to the reader to judge why that is.

I don’t agree on penalising expensive cars. An expensive combustion car replaced by an expensive EV provides the same ecological benefits as a budget combustion car replaced by a budged EV.

Do Not Read Between The Lines

Affluent drivers drive more on average, and generally premium cars are less efficient. So each electrified premium car may have a greater effect.
Affluent owners are also more valuable to many businesses, and help encourage market support.

“We need to give huge tax cuts to the job creators and let the wealth trickle-down from above!”

I don’t see subsidizing six-figure cars as the most effective way to encourage EV adoption. Those cars already sell themselves without taxpayer help.

A $7500 tax rebate does not have a meaningful impact on a decision of whether or not to buy a $90,000 car.

As I see it, that’s the point of the tax rebates: to make EVs a more attractive option financially.

If an EV costs $90,000 and a comparable combustion car costs $82,500, the $7,500 tax rebate certainly makes a difference on the buying decision…

The corporations all have their tin cups out.

Nothing wrong with that, name one American industry that does not get government cheese both directly and indirectly? Name one?

It is even bigger than th United States. All successful manufacturing nations subsidize industry. It is simply the reality of modern capitalism.

Hate the game….