U.S. Senator Moves To Scrap $7500 Federal EV Incentive, Tax Them More Instead!

A Republican senator in the United States has introduced a bill that could spell the end of the $7500 federal tax credit for electric vehicles.

The bill, introduced this week by Wyoming Senator John Barrasso, wants to terminate the EV credit and to “provide for a Federal Highway user fee on alternative fuel vehicles” instead, something that would constitute a total reversal of federal policy.

Congress’ website has yet to list all the details about the bill, but Electrek claims that the bill is already being backed by some Democrats. Given that both the Senate and the Congress are controlled by Republicans, there’s a strong chance this proposal might actually become a law in the near future.

As it stands, the tax credit is awarded for each EV and plug-in vehicle a manufacturer delivers in the United States. Once said manufacturer deliveries more than 200,000 qualifying vehicles, the tax credit is reduced to $3750 for a period of six months. After those six months, the tax credits falls to $1875 and is put in place for a further six months. After that, it is dropped entirely. Tesla recently became the first carmaker to have its tax credit drop to $3750.

Green Car Congress reports that the bill has been referred to the Senate Committee on Finance.

While electric vehicles are becoming cheaper and more popular, sales are still helped by the federal tax credit. For example, in Denmark, sales of electric vehicles fell drastically from almost 5000 in 2015 to around 700 in 2017 after the government phased out a number of generous subsidies. These changes crippled sales of Tesla and the Model S. Something similar happened in Hong Kong, when a tax break was slashed and Tesla’s local sales fell to zero.

Oh, and one more thing: “Oil and Gas” are, according to Open Secrets, Senator Barrasso’s second-biggest donor after “Securities and Investment”. Feel free to draw your own conclusions…

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  • Jay

    plot twist!

  • Just fill up the senators house with petrol fumes, if he is such a fan, let him have a blast!

    • Shane

      Should they just fill it up with whatever they use to power up the recharging station? Oh wait those are powered mostly by natural gas and coal… You act like these are 100% green/solar.

      • Kamil Kolasiński

        Oh, wait! Non renewable resources are limited and its better to use them in extremely controlled environments, before we switch to 100% Renewable. If you think that your ICE car can be more energy efficient than a 1km² powerplant, I envy your optimism. Plus! Some Tesla Superchargers are CO² neutral.

        P.S.: I apologise for any spelling mistakes. My autocorrect seems to have stopped working correctly…☹️

      • 1. First of all EV’s don’t pollute locally, hence making the most densely populated areas cleaner
        2. EV’s are getting cleaner each year as the energy production gets cleaner. ICE cannot compete with this in any way.
        3. As a responsible EV owner you have the choice to a. create clean energy b. buy clean energy

        Btw, check what powers one of the biggest network of recharging stations in Europe: Fastned.

        • Paul Webster

          1. First of all EV’s don’t pollute locally, hence making the most densely populated areas cleaner
          While this is largely true, depending on where you live and the condition and location of your electrical power generating plant, as much as 25% of the electricity can be dissipated before it gets to a charging station.
          2. EV’s are getting cleaner each year as the energy production gets cleaner. ICE cannot compete with this in any way.
          Energy production is getting cleaner, relatively but the problem is voltage drop off from longer transmission lines. This is somewhat solvable with technology but the cost is immense to upgrade the electrical grid.
          3. As a responsible EV owner you have the choice to a. create clean energy b. buy clean energy
          This is true, but be prepared for significant increases as power generating operations move to implement “green” technology.
          ICE and the supporting industries have spent untold billions to deliver an economically efficient product. The competing EV industry has not. They are piggy backing on an infrastructure paid for by ICE and relying on Government subsidies while adopting battery technology that will make us dependent on foreign (some of which are very unfriendly to the US) sources.

          I cringe each time I need to pay for a replacement lithium battery for one of my power tools. It costs twice my annual fuel expenditure to operate my zero turn.
          Local energy production and new battery technology is what is needed to make the promises and the hype of green marketing a reality. Government intervention is not the answer.

          • Rainy Day Interns

            “…Government intervention is not the answer…” It is ABSOLUTE the answer when the profit motive is the main driver in the people’s decisions and the goal is to change the behavior of the masses addicted to a set way of doing something.

          • Paul Webster

            We can agree to disagree or you can provide examples of Government intervention that changed the behavior of “masses addicted to a set way of doing something”.

          • Rainy Day Interns

            Not wearing seat belts…

          • Paul Webster

            Seat belts were brought to market by a domestic manufacturer. The Government “got into the game” largely to protect consumers who were buying imports (Volkswagen, Toyota etc.) which were notoriously unsafe, but which got good gas mileage for the day. We had seat belts in all our cars beginning in 1956, long before the Government mandated it.

  • Dr Bjorn K. Von Strangefingger

    I agree… the ev crowd needs to pay their share of road related expenses. And quit subsidizing the rich Tesla buyers. F’ing ridiculous!

    • tkindred

      Probably something to do with lowering emmissions. The air in cities like LA still needs to be cleaned up. EVs might be good for that.

      • brn

        Yea, but the air where I live is just fine. Why should my federal tax dollars go toward cleaning up the air in the richest State in the country?

        • tkindred

          California contributes the greatest source of revenue to the Feds than any other state.

    • Dude

      If ev owners have to pay their “fair share” (whatever than means and how it wasn’t being paid idk) then a carbon tax for ice vehicles, especially the largest and least efficient, makes sense. They do more damage to roads after all

      https://uploads.disquscdn.com/images/e2cce7f868247a536c6b37089708821637b5954f4340c6a303c4fbec43a9e60a.png

      • MarketAndChurch

        the car driving public generate more than enough taxes to pay for road maintenance. The problem is that the money often goes into things like public transit which has never ever turned a profit in virtually all of the united states.

        • Dude

          Public transit is not supposed to make a profit. That’s not the point (it shouldn’t be). It allows people who may not have the means to cross large cities for jobs and other economy boosting things.

        • Six Thousand Times

          Incorrect and easy enough for you to look up. The gasoline tax has not been raised in forever and the general fund has been needed to subsidize road construction and maintenance.

        • Rainy Day Interns

          Not everything has to turn a profit, but they do need to generate benefits.

    • THEN THEY CAN BUY A CHEVY.

    • Rainy Day Interns

      Then make a road tax and tax all users of the road, create an air tax for those polluting the air, etc Don’t hide it as a cowards way of helping the oil and gas industry to increase its profits.

    • Stephen G

      Why does the oil industry receive $40 billion in subsidies every year?

  • tkindred

    Environmental sustainability vs cost of maintaining infrastructure.

    • bxniels0

      Environmental sustainability? Like how American products have built in obsolescence? LOL

      • IN GENERAL THAT MAY BE TRUE BUT IF YOU LOOK AT THE LEADER IN ELECTRIC CAR MANUFACTURE YOU’LL SEE THAT THE DESIGN DOESN’T CHANGE EVERY YEAR JUST TO CREATE A DESIRE FOR THE LATEST. SOFTWARE IS UPDATED REGULARLY ALONG WITH SWAPPING OUT OUTDATED COMPONENTS ALL WHILE STILL OWNING THE SAME CAR.

      • brn

        American products? Why single out the US. I’m pretty sure Chinese products have same issue, to a much larger extent.

  • Well he has a point. If your car is using less gas, it means you are paying less gas taxes, which pay for road and transportation infrastructure. This also means that non-electric vehicle users are hugely subsidizing your use of the roadways.

  • OF COARSE I’S A REPUBE. THIS WAS A SHORT TERM THING WHICH MAY HAVE GIVEN MANUFACTURERS AND BUYERS AN INCENTIVE. LET IT PLAY OUT AND SEE IF IT WORKED.

    • Mr. EP9

      With some support among democrats.

  • Paul Webster

    FTR States tax fuel more than the Feds. Approximately 35% of the fuel tax collected by the Feds is diverted away from the originally intended use (maintaining roads and bridges). Some States divert more than the Feds. Four countries account for 80% of lithium exports (the main ingredient in nearly all battery powered cars and hybrids.) Recycling these batteries is costly (and not born by the owner but subsidized by Government.) The “answer” is complex. IMO more taxes are not the answer (unless somehow the monies are used only for the infrastructure… fat chance). Incentives to design and build a new generation of batteries using locally sourced materials (present technology is creating a “lithium” OPEC) would be a first step. The charging scenario is an entirely separate problem. Green marketing is creating desire for a product that simply makes zero economic sense given the state of technology that exists.

    • MarketAndChurch

      yeah, it’s diverted into public transit.

  • MarketAndChurch

    I would get the chevy bolt if it was a gasoline hybrid with awd. It’s a very nice car.

    • Six Thousand Times

      Except for the awd, that’s called a Volt. And, “hybrids” are an engineering dead end.

  • Shane

    Seeing how my home state of Illinois messes up every penny we give them I’m against any new taxes.

  • Six Thousand Times

    For it – with a few reservations. Need to see the deets but there is no sense for the average taxpayer to subsidize the (usually) wealthier purchaser of anything. Plus, with no gasoline tax, we’ll need a way to pay for roads.

  • Stephen G

    Maybe they should end the $40 billion in oil & gas subsidies too. Maybe gasoline should be $7.00 a gallon like it is in the rest of the world. Why stop there…end farm susidies, why am I paying for farmers (BTIM congressmen and senators that own land) not to grow crops!

    • MB

      Great point Stephen. It just makes me laugh every time they act like there are no subsidies associated with the oil and gas industry. Lets add the cost to protect the shipping lanes, all the health costs, and the cost to clean up all their oil spills. Maybe someone should give Elon Musk a refund for the electric charging infrastructure his company built across the US.

      • Stephen G

        The whole system is convoluted and difficult to understand. And to protect their golden goose, big business makes sure it stays that way.

        • MB

          True. It would be great if it was a level playing field and there were no subsidies for either industry I don’t see that happening anytime soon.

          On a different note, I don’t think it matters what they do at this point as there is too much money to be made in the EV space. The US can drag it’s feet, but we will be forced to react as Europe and Asia are adopting this technology at a much faster pace. I guess we can let the Chinese sell all the EV’s to the world or we can get our act in order and be the world leaders in this industry. Thankfully Tesla is forcing everyone else to react.

          • Stephen G

            Subsidies are a good idea if the burgeoning industry is good for society but the industry should be able to stand on its own eventually. I agree about electric subsidies ending. Once the public discovered the acceleration rates that could be achieved then everybody was on board. LOL

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