First 2017 Chevrolet Bolt EV electric car [photo: Patrick Reid]
Members of the lame-duck Congress all got letters on their desks Tuesday stating why the electric-car tax credit should be revised and extended.
Along with a five-point fact sheet made public Tuesday, the effort is the first salvo in a battle by the newly-formed EV Drive Coalition to extend the plug-in vehicle tax credit, which is expiring for two automakers next year.
Predictably, those two automakers, GM and Tesla, are the driving force behind the moves, according to sources familiar with the coalition's efforts, though the coalition includes other automakers, charging networks and charger manufacturers, and even the Christian Coalition.
The existing tax credit awards $7,500 to every consumer who buys an electric car from each automaker until that automaker sells 200,000 plug-in cars. Then it begins to wind down and soon disappears.
That's the situation that Tesla and soon GM will face. Tesla hit the 200,000 sales bogey in July, and its buyers' credits are set to halve Jan. 1. GM has said it will reach 200,000 sales before the end of the year, which means the credit to its buyers will start to wind down in the middle of next year.
GM announced on Monday that it will end production of the Chevy Volt—the car to which the vast majority of GM's credits have been allotted—on March 1, when its credits are due to be reduced. The move comes amid a restructuring that will eliminate four models, five factories, and 15 percent of GM's salaried workers.
The EV Drive Coalition argues that this creates a bifurcated market, penalizing those automakers most successful at selling electric cars by raising the effective price on their models and rewarding laggards.
The letter to Congress [PDF] reads in part: "The current EV tax credit, which goes directly to consumers, creates an uneven playing field by establishing a cap on the number of consumers who can use the tax credit based on which manufacturer made the car. The U.S. EV market is at a critical crossroads as manufacturers begin to hit that cap; the EV tax credit should be reformed so all EV purchasers continue to receive the benefit of EV tax credits."
In its accompanying "fact sheet," the Coalition points out that:
- 300,000 jobs in 48 American states are dedicated to building, selling, and servicing electric cars,
- Demand for electric cars is expected to reach 30 million by 2030 and 50 million by 2040, and
- China is currently the largest manufacturer of electric cars.
Without a reformed tax credit, American manufacturers will be left behind, the coalition argues.
It aims to have the tax credit reinstated for all automakers and extended for five calendar years, regardless of how many electric vehicles are sold or by whom.
"Reforming the credit will create a level playing field for ALL electric vehicle manufacturers," the fact sheet says, "giving consumers the freedom to decide which car they want in a free and fair market. More options lead to more competition, which spurs American innovation and maintains our position as a global leader in automotive technology."