A coalition of 166 representatives sent a letter to the U.S. House leadership Wednesday to show support for reforming clean energy tax policies. One key element of the plan is an expansion of the federal EV tax credit
Proponents of reform are calling for an increase in the existing cap of 200,000 eligible sales per manufacturer to 600,000, with a maximum credit of $7,000 (down from the current $7,500 maximum) for sales beyond the initial 200,000. The bill would also reinstate the federal tax credit for fuel cell vehicles which expired in 2017. Under the new proposal, it would be extended through 2028.
"The transportation sector is now the largest source of greenhouse gas pollution in the United States," the letter stated. "Enacting tax policies that will help accelerate the transition to zero-emission vehicles is essential to addressing the climate crisis."
The push is also getting bipartisan support in the Senate, but runs afoul of the Trump administration's stated intent to can the electric-vehicle tax credit altogether, likely due to pressure from oil interests claiming that the credit could cost as much as $95 billion by 2035. Meanwhile, the bill's supporters include the auto industry, the utility sector, and a diverse list of clean energy advocates and environmental groups.
Automakers currently feeling the heat from expired subsidies include premium EV juggernaut Tesla and General Motors. Tesla has sold so many vehicles that its individual subsidy is now just $1,875. As of May, 2019, Nissan had exhausted more than 50 percent of its allotment, with Ford trailing only slightly behind.
The end of full credits for Tesla buyers caused a small run on the EV automaker's inventory late in 2018, resulting in then-record-high Q4 delivery figures in the United States. Unfortunately for Tesla, many of those purchases cannibalized volume that otherwise would have been fulfilled early in 2019, raising alarms just as Tesla started to deliver larger numbers of cars overseas.