Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

U.S. Democrats propose dramatic expansion of EV tax credits that favors Big Three

Stock MarketsSep 11, 2021 01:25AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: Computer science professor Christa Lopes' Scion IQ electric car is plugged in in her garage in Irvine, California January 26, 2015. REUTERS/Lucy Nicholson

By David Shepardson

WASHINGTON (Reuters) -U.S. Democratic lawmakers on Friday proposed an expansion of tax credits for electric vehicles that includes significantly higher subsidies for union-made zero emission models assembled in the United States.

The proposal, a key part of President Joe Biden's goal to ensure EVs comprise at least 50% of U.S. vehicle sales by 2030 and boost U.S. union jobs, will give Detroit's Big Three automakers a big competitive edge and has drawn criticism from foreign automakers like Honda Motor Co and Toyota Motor (NYSE:TM) Corp.

The tax credit for up to $12,500 per vehicle for U.S.-made union-made zero emission models compares with a $7,500 incentive for most other electric cars - an amount that has not changed.

The bill, however, does away with phasing out automakers' tax credits after they hit 200,000 electric vehicles sold, which would make General Motors Co (NYSE:GM) and Tesla (NASDAQ:TSLA) Inc eligible again. It would also create a new smaller credit for used EVs of up to $2,500.

House Democrats had not previously disclosed how much they might boost EV credits. The dramatic hike and other revisions could cut the price of some EVs like GM's Chevrolet Bolt by as much as a third and make battery-powered vehicles more competitive with or in some cases cheaper than similar gasoline models.

"We want to incentivize this. It puts American manufacturers in the lead, which is where we want them, and it reduces emissions faster than any other policy that we could put in place," Representative Dan Kildee, a Michigan Democrat, told Reuters.

He said the new EV tax credit would cost an estimated $33 billion to $34 billion over a decade.

"In a decade, we want to see American workers making good wages building American electric vehicles," he added.

Kildee said Biden, who has made the proposal a cornerstone of his climate policy, "was very insistent" he wanted a hefty EV tax credit. "He wants us to lean in. Let's go big and let's get this done," Kildee said, recounting a recent conversation with Biden.

BILL TO FACE OPPOSITION

GM, Ford Motor (NYSE:F) Co and Stellantis NV, the parent of Chrysler, assemble their U.S. made vehicles in plants represented by the United Auto Workers union.

In contrast, foreign automakers operating in the United States as well as Tesla do not have unions representing assembly workers and many of them have fought efforts by the UAW to organize U.S. plants.

As talk of the EV tax proposal gathered steam, Honda said in a statement last month that its workers "deserve fair treatment from Congress and should not be penalized for their choice of a workplace."

The House Ways and Means Committee will vote on Tuesday on the proposal which is a part of a broad tax measure in a planned $3.5 trillion spending bill.

The bill will face opposition in the Senate, which is evenly divided 50-50 between Republicans and Democrats. Republicans have harshly criticized much of the spending bill and Democrats must hold onto all 50 Democratic Senate votes to win approval.

But a Senate panel in May also approved legislation to boost EV credits to as much as $12,500 for U.S. vehicles made by union workers - despite all Republicans in opposition.

The proposed EV credits would last for 10 years and consumers would be allowed to deduct the value of the credit from the sales price at the time of purchase.

In 2027, the $7,500 credit would only apply to U.S.-made vehicles. There are also lower credits for EVs with smaller battery packs.

The bill says individual taxpayers must have an adjusted gross income of no more than $400,000 to get the new EV tax credit. It would limit the EV credit to cars priced at no more than $55,000, while trucks could be priced up to $74,000.

But those limits may face pushback.

Last month, the Senate in a non-binding amendment narrowly voted in favour of prohibiting taxpayers from claiming EV tax credits if they make more than $100,000 annually or if vehicles cost more than $40,000.

U.S. Democrats propose dramatic expansion of EV tax credits that favors Big Three
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (12)
Mike Mike
Mike Mike Sep 12, 2021 8:30PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Union works are lazy funk ups
Todd Gray
Todd Gray Sep 11, 2021 5:09PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
funny how the group $400k earners in the same category as $40k earners. Same thing when they gave stimulus money to those who never stopped working and/or didn't need it at all.
Todd Gray
Todd Gray Sep 11, 2021 5:05PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
No matter what American politicians do, it's never fair. The word fairness means everything, but actual fairness.
Darren Caris
Darren Caris Sep 11, 2021 2:52PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Democrats are in the pockets of the unions.
Connecticut Yankee
A_Jaundiced_Eye Sep 11, 2021 9:25AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Just like before the Depression.  Other countries will follow our lead and only allow their voters to buy cars made in their countries.  Smoot-Hawley, anyone ?
Igor Vlacuha
Igor Vlacuha Sep 11, 2021 5:05AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
veru good electric cars ...
Barak David
Barak David Sep 11, 2021 4:28AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
so three companies (Ford, GM, Stellantis) are milking the government, instead of just stop subsidizing Oil.. all in the name of Unions.
Lars Hellman
LarsH Sep 11, 2021 2:30AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
It will hasten the big downfall.
pr maske
pr maske Sep 11, 2021 12:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
if government increases tax on gasoline then government will get Revenue and People will buy more EVs.
Jamie Kent
Jamie Kent Sep 11, 2021 12:53AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Higher gas prices directly hurt the most vulnerable low wage earners who can't afford an ev regardless of a 7500-12500 subsidie. There is a statistic I believe that shows they also drive further than higher wage earners for work on average. High gas prices disproportionately affect the poor, and therefore should not be part of any Democrat party policy.
Mike Dough
Mike Dough Sep 10, 2021 11:57PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Lucid
Transparent Labs
Transparent Labs Sep 10, 2021 11:26PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Hope consumers dont buy this ********so they fail!
Darren Caris
Darren Caris Sep 10, 2021 11:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
union made? really? talk about blatant, overt control of politics by the unions...
Ed Glass
EddieG Sep 10, 2021 11:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
it's limiting to all us auto makers, don't you see? sell more American cars instead of Japanese or Korean or Chinese.
Josh Davis
Josh Davis Sep 10, 2021 11:25PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Ed Glass but why electric why not all american cars ?
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email