Republican Senator Proposes Removing 200k EV Tax Credit Trigger

Chevy Bolt, Model 3, Nissan Leaf

OCT 17 2018 BY WADE MALONE 59

The proposed bill would not phase out electric vehicle tax credits until 2022

Earlier this month, Senate Republican John Barasso proposed not only a death to the electric vehicle tax credit, but a brand new tax on EVs (S.3559). So far it has received little backing from either party.

Back in June, a polar opposite proposal was made in the House of Representatives. Democrat Peter Welch of Vermont introduced a bill to remove the 200k credit trigger, extend tax credits for all automakers for 10 years, and create a time of purchase rebate (H.R.6274). While there is some bi-partisan support for a credit extension, such a bill becoming law was unlikely.

Now a new challenger approaches. Republican Senator Dean Heller of Nevada is reportedly seeking the removal of the 200k credit trigger per manufacturer. Instead, unlimited credits would be available for all automakers until 2022.

If passed, the Chevy Bolt/Volt, Tesla Model 3 and others would continue to be eligible for the EV tax credit until 2022

While we do not have the full language, this is not the first we have heard that Heller was working on a bill. If Reuters is correct, this would be a huge boon to Tesla and General Motors. Both are plug-in pioneers facing the end of their credit eligibility. Thanks to best selling models such as the Model 3, and the Chevy Volt and Chevy Bolt EV.

This seems like a common sense, middle ground approach. Consumers support the credit. Most automakers and consumers support expanding the EV tax credit. A General Motors representative told Reuters that it is important “to provide a federal tax credit for consumers to help make electric vehicles more affordable for all customers.”

However, other automakers told Reuters that they are unsure about Heller’s bill. Reuters reports that some say that the credit should be limited to “vehicles below a certain price.”  Other manufacturers feel Heller’s bill would “penalize” automakers that have not started selling EVs in large quantities. Well, perhaps they should get to work on doing that.

Source: Reuters

Categories: Chevrolet, General, Tesla

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59 Comments on "Republican Senator Proposes Removing 200k EV Tax Credit Trigger"

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ModernMarvelFan

It actually makes sense. They should move it to end of 2021 so everyone EV maker would start to rush to get it by then.

jonash

Yes, and the way it works now when two big american companies (GM and Tesla) will loose the credit while imported cars will continue receiving it for some time seems pretty stupid from an american stand-point.

Bonaire

Talk to the million+ Prius buyers in the USA who all bought fully-imported cars. All made in Japan. They don’t care about USA jobs, they care about “saving the world” though, right?

Allan

That’s the dumbest thing I ever heard today. Why is “saving the world” a bad thing? If you can support local business while saving the world even better, but then you backwards types hate on Tesla on the other hand, so make up your mind, you don’t wanna be part of “saving the world” fine, but are you with America or not?

Joshua Burstyn

Exactly. Actually causes manufacturers to get their asses in gear and release a damn EV instead of press releases and leaning on Tesla and GM to do the heavy lifting in dev. and promotion of EVs, then cynically swooping in at the last moment to take their sales when the former are out of rebates.

Vexar

What a fool. This isn’t the year for Republicans to find reasons to lose more votes by hating on the environmental investments our federal government has made, especially ones that make EVs more accessible to voters. I realize that some wealthy opportunists in the car business game it all by buying the cars and doing clever tricks with titles and leasing and re-selling, but hey, the cars are getting bought and more importantly, driven.

He must like the smell of his own exhaust.

Viking79

You notice he is from Nevada, which stands to benefit from extending the credit for Tesla.

Pushmi-Pullyu

Yup. My first reaction was a pleasant surprise that a GOP member of Congress had proposed a measure which might actually get bipartisan support and would benefit the EV revolution. (Not all GOP congresscritters and Senators are far-right wingnuts, altho far too many of them are these days.)

But my second reaction was to observe this congresscritter is from Nevada, so his proposal appears to be purely for the economic benefit of his own State. Not that there is anything at all wrong with that; after all, people elect congresscritters to represent their interests, rather than everyone’s inerests. But if this bill is seen as a boondoggle primarily benefiting Nevada (and California), then it has much less chance of winning wide bipartisan support.

Taylor Marks

It benefits all states where BEVs can be produced. Doesn’t Nissan make the Leaf in Tennessee? Doesn’t GM make the Bolt and Volt in Michigan?

Removing the cap and replacing it with a deadline will encourage all automakers to move quicker with converting their existing factories over to produce BEVs. This really sets up an immediate do-or-die for all of them. Either they move now and learn how to make BEVs affordably, or they make increasingly unpopular vehicles with no assistance in learning their way around the production of BEVs.

Kdawg

It also benefits everyone by helping us get off fossil fuels. (heaven forbid)

Pushmi-Pullyu

In a perfect world, your argument — being both correct and logical — would carry the day in discussions and debate among congresscritters.

Sadly, we live in a world increasingly far from that ideal. 🙁 While I would like to believe that your argument would be at the center of any actual discussion by elected officials over this bill, I think my comments, unfortunately, reflect the actual subjects of any discussion, debate or arguments on the subject by anyone in a position to vote on it.

TwoVolts

My reactions exactly as well.

John

It’s apparent that this congressman is trying to support his state, which isn’t a shock, but if it’s a win for everyone, who should care?

Allan

Bingo

Dimitrij

Everyone in the US, and I’d say in the world – not only in Nevada – stands to benefit from helping Tesla and other bona fide rEVolutionaries.

Dimitrij

I think everyone agrees that the 200,000 limit per brand and other provisions of the existing incentives are no longer consequential for the mass adoption of EV’s, and therefore needs to be changed in some way that is more purpose-oriented and productive.

As a part of an ongoing discussion about such changes, people are welcome to share their ideas. Let me note that bashing “the Republicans” may resonate closely in some echo chambers, but it is not going to help promote EV’s. Finding common grounds and looking for creative solutions, yes.

TwoVolts

Which GOP senator are you referring to as a fool? Did you read the article – or just the first sentence?

Vexar

I didn’t read very well, no. The one from Wyoming. Different bill, same week. Fool’s mistake.

John

Not sure why you think Heller is a fool for proposing extending the federal tax credit? How is he hating on environmental investments by extending a pro-EV tax credit?

Vexar

This isn’t the bill from the Wyoming senator, it’s something different. My mistake.

Tim

I’m very much hoping that the conversion to point of sale rebate bill passes once the democrats take over the house next month… having to wait for tax returns and deal with itemized taxes is more than a bit of a pain. Might be tough to get past the senate, but there’s a lot of lobbying going on, and this could easily be spun as an American jobs/competitiveness thing. (Current phaseout language favors foreign laggards over domestic trailblazers.)

Re-Volted

Exactly what I’ve been advocating, that “point of sale” rebates will bring down the payment, that’s what I need to finally “sign z papers”.
The current system is flawed and just another give away to the upper class.

Benz

They need to change the whole system.

•It should not be tax related.
•Point of sale.
•No price cap.
•The fixed amounts have to be set at $5,000.- for a BEV and $1,000.- for a PHEV.
•It has to end for all car manufacturers at the same time.

Ziv

I disagree about the price cap but strongly agree on your other points. I dont think the S or the X need a credit, they will sell regardless of whether the buyer gets a credit. Other BEVs (not the TM3 so much but it has to be universal) need the extra motivation that a $5000 credit brings to the table.

John

I don’t think there should be a price cap simply because if a company (Tesla) needs sales of high-end models to support their mass-market cars, then essentially supporting the high-end sales is supporting the lower ones, too.

theflew

I think the point is if you can purchase a $75k+ vehicle if Tesla padded the MSRP by $5k it wouldn’t make a big difference to the buyers.

John

Most of the Model 3’s aren’t priced at $75k+. So the tax credit IS super important to a lot of those potential buyers.

Ian

Looking at this from the UK, Clearly;

1) The rebate/tax credit should run out for all car makers at the same time, otherwise it gives the Chinese an advantage. (The Chinese can create as many brands as they need to get 200k credits per brand.)

2) the size of the credit should reduce as the number of EVs sold increases. (this keep the total cost per year under control.)

3) point of sale rebate that is not depend on someones income is much better then a tax credit. And will also remove the E d of year EV sale rush.

trackdaze

There needs to be a taper for the credit over time representative of the cost reductions in the technology.

CDAVIS

From article: “Republican Senator Proposes Removing 200k EV Tax Credit Trigger…automakers told Reuters that they are unsure about Heller’s bill. Reuters reports that some say that the credit should be limited to “vehicles below a certain price.””
————

Considering there are several proposals being floated it looks like some kind of compromise proposal will be put in place… what we are seeing here is for public optics and the final “compromise” deal has likely already been settled.

Hopefully the tax credit change does end up somehow benefiting GM and not Tesla… likely it’s GM that is behind the scenes lobbying to have the tax credit extended.

M Hovis

Thinking the same thing. The price cap could be GM. I think Tesla could find clever ways around it though. For instance, sell a base model $35,000-$40,000 if that is the cap, then sell options later especially autopilot. Go to the service center to swap out wheels. Just the base and those three options would cover a huge number of Model 3s in 2019-2021.

CDAVIS

@M Hovis said: “Thinking the same thing. The price cap could be GM. I think Tesla could find clever ways around it though. For instance, sell a base model $35,000-$40,000 if that is the cap,..”
———-

Good point.

For that scenario would adding optional cost items after the initial car sale be doable with a car loan and/or lease… or would one have to pay for those additional cost items out-of-pocket?

Benz

@ CDAVIS

“Considering there are several proposals being floated it looks like some kind of compromise proposal will be put in place… what we are seeing here is for public optics and the final “compromise” deal has likely already been settled.”

Interesting thought

How could such a compromise deal look like?

Ron M

Dean Heller proposes this 3 weeks before a close race to keep his job. There’s no way the GOP will support this and he knows it.

Get Real

My thoughts exactly.
Most Trumpster Republicans want to kill EVs and RE and instead subsidize Fossil fuels and gas guzzlers.

Ziv

Cap the eligible sales price at $50k, make the credit $5000 and cut it in half at the beginning of 2022 with the final credit being for cars sold in December of 2022.
This shouldn’t last long because it wont need to last long. Cell prices have fallen from $10,000 per kWh in 2010 to around $130 now. The credit is working.

Dweez Model3 driver

Heller is facing a tough reelection battle in a few days. While the proposed change to the legislation is commendable, it does not erase several years of poor political judgement and self-benefiting spineless leadership. He will be voted out, in my views.

Do Not Read Between The Lines

Why on earth would the Republican Senator for the Northern Nevada support changing the Tax Credit to unlimited per manufacturer, but limited by time?
😉

John

Probably because he realizes the only way the bill stands a chance in hell of passing is by giving something on the back end. And probably because the manufacturer that can crank out the most unlimited amount of BEVs in that time frame just so happened to build a $5b Gigafactory in his state.

Bonaire

Fix the credit. Remove it. Make it a refundable tax deduction so low-income people can actually use it.
Make it something that helps lower-income while not being too bad for higher-income.

$4000 refundable deduction for purchase of new plug-in EVs and PiHV of over 14 kWh on board.

The thing with PiHV continues to be “they don’t even have to plug them in” to get the perks – such as HOV lane access and tax credits and state rebates. Those are problems that should be looked at too. Rich people don’t need the credit/deduction. lower-income people might want the fuel savings of EV and only have the used-market now to get one. There is a grant program offering $5000 for lower-income people in CA to get new *or* used plug-ins which adds to the help.

But a tax credit is one that is not beneficial to anyone other than those making good-amounts of income.

MT Michael

There is no such thing as a refundable tax deduction. Deductions reduce the amount of income exposed to taxation. Deductions are useless for most taxpayers because the fixed standard deduction has been increased to the point where Itemization usually does not result in lower taxes.
You’re thinking of a refundable tax credit, which is applied directly to your final calculated tax liability, and results in a refund or increase of an existing refund if your liability is negative. The current EV policy is for a non-refundable tax credit, so it can drive your tax bill to zero, but you cannot be paid for any credit that is not applied toward tax due.
A refundable tax credit would definitely help drive EV adoption down the income scale.

Counterpoint

While it’s true that a tax credit only benefits those with high enough income to support it, the same applies to buying a new car. I’ve never owned a new car and unless my income grows significantly, I’m unlikely to ever be able to afford one. The tax credit was never intended to help people in my income bracket. The goal was to incentivize high end new car buyers to purchase electric vehicles so more EVs can get on the road.

pipestem

That is ok. The tax credit has the effect of suppressing used EV values. You still get part of the benefit without even buying a new one.

Re-Volted

That should be true, and what I expected, but not what I’m seeing in the Oregon used listings. No proportional drop at all.

Kdawg

How about some legislature to transition all Federal government vehicles to plug-ins too. If my tax dollars are buying these vehicles, I want them to have plugs.

Ron M

States also and I don’t understand why electric utilities aren’t buying all EV’s. I’m guessing the real problem isn’t people not buying electric vehicles it’s more a manufacturers not able to meet the demand. Most manufacturers are simply hoping the administration freezes CAFE standards where they are and are able to continue selling ICE vehicles.

Get Real

Actually brings up a good point and that is that by and large the monopoly electrical utilities have not seized the opportunities afforded them by a transition to BEVs and instead many are fighting tooth and nail against homeowner solar.

Clive

Good then maybe TSLA will start leasing the Model 3 sooner than later.

Ocean Railroader

I could support the idea of this but at $4,000 a EV to help get EV makers to cut their car prices.

At the same time we do need something like this due to all that is happening in Sandi Arabia.

Thomas

I’m all for it – these credits do nothing to make these cars more “affordable” and the people who can afford them (especially Tesla), don’t need the credits anyway as they can already afford the cars. If you really want to use credits as a way of making EVs more affordable, they should be deducted off of the actual sales price at the time of purchase.

Ron M

Senator Dean Heller is in a close race for is job. He hasn’t supported renewable energy or EV’s until the election was 3 weeks away. Just read an article where McConnell said we need to reduce the entitlements Social Security, Medicare and Medicaid. He’s not happy now about the deficits. Reducing corporate tax rates from 35% to 21% has reduced corporate tax revenue by 31%. Individual tex revenue has increased by 4%. 2018 Fiscal year deficit was 779 billion. Where’s all the tax revenue we were suppose to get fro the trillions that we held in offshore accounts. The rich eat good and the rest eat there you know.

esto perpetua

Do you have anything of substance to contribute to an EV article other than left-wing points that belong to Huffington Post or Daily Coss?

Get Real

And do you have anything to contribute besides your love of the Trumpster?

Ron M

Kushner could afford an EV he made something like 350 million since 2009 but paid zero taxes. Apparently real estate investors can depreciate there real estate investments because the building decays and crumples overtime I guess I’m not a tax specialist or a real estate investor. I certainly always assumed that real estate is a good investment and real estate appreciates over time.
Do you think the GOP removed this I don’t know some would call it a loophole when they wrote the Tax Plan of course NOT. The administration claimed the TAX PLAN would cost the President a lot of money RIGHT. The middle class were gonna get have 4,000 less to pay in taxes then it was 1,000 and then some may pay more. I would say it’s the most asinine thing I hear of in a day. Unfortunately I learn several asinine every day from this administration so it doesn’t surprise me at all.

Will

I would attach an amendment that manufacturers get the credit if they sell nationwide. No more compliance cars. I’m good with the 2022 trigger.

Windbourne

I would rather see them drop all of these credits, and then SLOWLY raise tax on gas/diesel to pay for infrastructure. It should go up by .01/gal/month for 50-100 months. In addition, the gas portion should go to the state, and for BOTH be required to be used ONLY for infrastructure.

And it is high time for EVs to start paying taxes.
How about assuming a .75 penny / mile?
Have the EV car owner pay $150 for the first year and show the mileage to the state. It is recorded.
Next year, they send in a statement that says how many miles are on the vehicle, and last years is subtracted and then the math adjusted. That difference is paid, and then the amount is rounded downwards to the 100, and that is paid to the state. The state then splits that with the feds.

In addition, require that non-residential car chargers pay .01/kwh during the busy hours. For most states, that will be 0900-2100. For CA, it will be flipped (apparently, they have daytime surpluses).
This will discourage EV owners, esp those with low MPC and/or Hybrid owners, from charging during those time.

Andy

Well, then stop that. So there is 2019, 2020 and 2021. The EV transition happens fast, no tax credit is needed by then.

Bob

I am not surprised. Heller need to get vote from Reno Tesla’s gigafactory workers, and extending the tax credit would definitely help.

Gator Rican

“Politicians and diapers must be changed often, and for the same reason.”

–Mark Twain