We'll likely never know whether it was the influence of auto lobbyists, pressure from the actual public, or a letter signed by two dozen mayors.

But however the sausage was made, it appears that the U.S. income-tax credit for purchase of a plug-in electric vehicle will not be killed after all.

Whether it would survive amidst the sweeping changes to the tax code proposed by Congress has been an open question for two months.

DON'T MISS: 22 mayors join letter urging electric-car tax credit retention by Congress

Draft legislation adopted by the House of Representatives ended the credit as of December 31, while the version adopted in the Senate retained it.

Now, according to a report published Wednesday afternoon by Bloomberg, "a Republican familiar with the process" said the credit has been retained in the "reconciliation bill" that blends the two versions.

That source, Bloomberg said, "asked not to be identified discussing the details before the bill is unveiled."

UPDATE: This article was published on December 14, 2017. The text of the final tax bill, following reconciliation of the individual bills passed by the House and the Senate, was released on December 15. The plug-in electric vehicle income-tax credit was not ended by that bill, so whatever happens when Congress votes on the bill, the tax credit will survive.

2017 Nissan Leaf

2017 Nissan Leaf

The tax credit has been identified as an important factor in the purchase of an electric car by at least half of buyers surveyed.

It provides a credit against an individual's federal income tax liability of $2,500 to $7,500 in the year of purchase, depending on the size of the vehicle's battery pack.

Vehicles with battery packs of the minimum 4 kilowatt-hour capacity receive $2,500, and those with 16 kwh or more receive the maximum of $7,500, with increments for pack sizes between those two capacities.

READ THIS: Senate tax plan leaves electric-car purchase credit in place

The credit starts to phase out once a company has sold 200,000 qualifying plug-in vehicles in the U.S., with a phaseout over several quarters thereafter that reduces the credit amount for each qualifying vehicle from that maker.

So far, General Motors, Nissan, and Tesla have all sold more than 100,000 qualifying cars, while all other makers are far behind.

A tax credit for production of wind energy was also retained in its current form; the House bill had proposed eliminating that provision for renewable energy as well.

Tesla Model S at Supercharger site in Ventura, CA, with just one slot open [photo: David Noland]

Tesla Model S at Supercharger site in Ventura, CA, with just one slot open [photo: David Noland]

According to the source, the language from the Senate bill for both credits was adopted by the conference committee that is reconciling the two bills.

The tax reform bill contains major cuts in tax rates both for businesses and high-income individuals, and numerous independent analyses project that it will add to the U.S. budget deficit.

CHECK OUT: House tax bill eliminates credit for all electric-car buyers

It appears that Republicans in Congress hope to vote on the bill as fast as possible, though no hearings have yet been held and its contents and provisions have not been shared with Democrats thus far.

No comprehensive U.S. tax-reform legislation has been adopted by Congress in roughly 30 years.


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