Trump’s 2020 Budget Calls For The Elimination Of EV Tax Credit

President Donald Trump has unveiled his 2020 budget which calls for the elimination of the $7,500 federal tax credit for electric vehicles.

Billed as “A Budget for a Better America,” the 2020 budget contains nearly $2.7 (£2 / €2.4) trillion in savings according to Office of Management and Budget acting director Russell Vought. Vought said these cuts are necessary as the national debt has surpassed $22 (£16.7 / €19.5) trillion and interest payments on that debt are projected to exceed military spending by 2024.

While Vought didn’t go into too many specifics during today’s press conference, he said the administration has “identified a number of wasteful, inefficient programs.” One of them seems to be the electric vehicle tax credit which some politicians have criticized as a reward for the wealthy.

While that might have been the case with early Tesla buyers, the tax credit is important for a number of mainstream automakers. In the case of the Nissan Leaf Plus, the tax credit drops the price of the $36,550 electric vehicle to $29,050. This puts the model within reach of a number of consumers who wouldn’t otherwise be able to afford it.

The tax credit has been popular with consumers and Reuters noted a congressional report said 57,066 people claimed the credit in 2016. However, this came at a cost of $375 (£283 / €332) million. Given the increasing number of electric vehicle sales, estimates pegged the cost of the program at $7.5 (£5.6 / €6.6) billion between 2018 and 2022.

While the Trump administration wants to eliminate the tax credit, the budget faces in an uphill battle in Congress. As a result, it remains unclear if the tax credit will survive.

  • LJ

    The EV tax credit never should’ve existed in the first place.

  • Jweisberg

    Either you can afford it or you can’t. The major of EV buyers are not poor or struggling to make ends met, they should not receive any tax credit. I don’t understand why it is taking so long to make these EV car affordable with out the government give away tax dollars.

    • Bo Hanan

      How will you determine this? EV’s are getting cheaper every year.

      • Jweisberg

        How will I determine what? Look at the data on the people who buy these cars, on an average they have a six figure income. Even with the tax credit these cars are not practical for the average middle class family. Why spend 35k for a small car when you can get the ICE equivalent for under 20k.

        If they are getting cheaper why do they still need tax credit?

        The credit is BS, because the Government states the credit will be in place until every EV manufacture sells 200,000 EV cars. The government should be using that money to either build up the EV infrastructure or invest it hydrogen fuel cell or something else.

        but whatever

        • Dark-Fx

          So EVs never end up on the used car markets? Everyone benefits from the tax credit, not just the person receiving it.

          • Jweisberg

            Buying a used EV ? LOL, that is like a person buying a used LCD TV from the early 2000’s when they can get a 2019 4k tv for a better/lower price. The cheapest EV vehicles on the used market usually get the lowest range, outdated tech, battery degradation etc etc, therefore they are still not practical for the average family.

            Again, the government should not be giving tax credit for just buying an ev cars. Like I said before, “The government should be using that money to either build up the EV infrastructure or invest it hydrogen fuel cell or something else”.

    • Jp

      The tax credits are not for people, they are for car companies to be encouraged to invest in the technologies associated with EVs so that it brings costs down for everyone.

    • MarketAndChurch

      I think the majority of EV buyers are upper middle class. They never were going to be profitable without government regulations forcing people into buying them, so if we want EV’s to be successful, we need to start realistically preparing the population for phasing out the ICE, as you see in many parts of Europe.

      I’m personally not in favor of that, and prefer the route that automakers are taking, by using their money-makers such as SUV’s, Trucks, luxury vehicles, etc. to fund their hybrid and EV programs. Like VW, or Ford and GM. “Free money” from China also helps.

  • Bo Hanan

    I wish someone would take his budget and break it into two parts-
    1. Benefits to the rich, and-
    2. benefits to the middle-class & below.

    • CarCzarDesigner

      Please stop with the Political & Class warfare! It is inappropriate and unfair. EV’s still don’t make economic sense and that is just the reality! If you want to save the World, via an electric car? Do it on your dime, not mine! With Trump’s tax cuts, the Treasury is actually seeing More Revenue money come into the Treasury, not less!. The problem is Government Spending which is out of control! You merely have to read and evaluate the US Debt Clock to understand, the spending problem is really quite serious and unsustainable.

      • MarketAndChurch

        Yeah, but they were – and continue to be – sold to the masses as making economic sense.

        They might make more sense this generation though, because mainstream offerings such as the CR-V or Explorer have never been as good as they currently are, and giving people hybrid versions of those vehicles that doesn’t detract – and in some cases, adds – from the overall driving experience might be the better way to go. My next lease in 2021 will be a hybrid SUV, and AWD, speed, handling, and safety/autonomous tech will be my primary priorities… priorities that would have been unimaginable 5 years ago, but we live in a day where you don’t have to make as many sacrifices as we used to driving hybrids and EV’s.

      • THAT WOULD BE FIND IF THE PRESIDENT SET AN EXAMPLE AND DIDN’T PROFIT ON THE TAX PAYERS DIME CHARGING RENT TO HOUSE THE SECRET SERVICE AT HIS PROPERTIES. WHEN ASKED DURING THE DEBATES WHY HE DIDN’T PAY HIS FAIR SHARE OF TAXES HIS RESPONSE WAS, “BECAUSE I’M SMART”. SORRY THAT’S NOT A FINE EXAMPLE.

        • CarCzarDesigner

          I wasn’t aware of this. Thanks for bringing it up. If you look into it, you will find Congress approved such measures. Both Democrats and Republican Presidents have done this for decades. So what are you arguing? Are you arguing the Clinton’s, Bush’s or Obama’s void of scandal? The Justice Dept is getting ready to release its report on the Russia collusion scandal and its going to implicate the Clinton’s & Obama attempting to de-legitimize a duly elected President of the United States. So, the real corruption and cheating is going to be laid at the feet of the Demo*rats.

      • SteersUright

        US Debt has increased substantially to the point of nearly all Ivey league school economists chiming in on the matter in concern. Technology and innovation rarely makes economic sense during the R&D stage, yet Im guessing you enjoy that smartphone in your pocket all the same? There are some fully entrenched in the status quo, for better or worse, and there are others set about constantly improving the human condition. I think I know where you stand.

  • EM1

    Why should I pay for someone else’s ride (through taxes)? They get to show off and get paid on youtube of their experiences while I drive a tunafish can.

    • TheBelltower

      As an EV owner, why should my taxes pay for the fuel that goes into your car? Unlike the one-time hit of my car, yours will consume my tax subsidies forever.

      • EM1

        I don’t think you have a EV.

        • SteersUright

          I’m pretty sure, despite using less gas, it still burns gas nonetheless. Subsidized gas, that is.

          • S3XY

            My Brabus Smart burns zero gas.

      • Mr. EP9

        You’re forgetting fuel is taxed as well, EVs are not, and those fuel taxes help pay for infrastructure and subsidized heating for poor people.

        • SteersUright

          You’re forgetting the unaccounted for but real consequences and expenses that hundreds of millions of globally driven ICE vehicles impose on us all, from money then spent to treat pollution related illness, to the ground contamination of gas stations themselves, to no longer seeing the sky midday, in Hong Kong or Paris, and hundreds of others. This isn’t a competition, its about moving society towards a cleaner, better world and to make these large scale societal pivots often requires major governmental support, incentives, and more.

        • TheBelltower

          That’s true. Though in half of US states, EV’s owners are charged extra fees every year when they renew their registration to offset what they don’t pay in fuel taxes. Seems reasonable.

    • S3XY

      You don’t. They get to keep more of the money they earned. That’s your misunderstanding.

      • EM1

        Link:

  • IF IT BENEFITED HIM HE WOULDN’T TOUCH IT.

    • LJ

      Don’t type in all caps. It makes you seem nuts.

    • SteersUright

      absolutely right.

    • really?

      • YEAH, REALLY. YOU THINK HE CARES ABOUT YOUR OR ME?

        • At least he’s doing a better job than the previous president

          • YOU MEAN THE GUY WHO WANTED EVERYONE TO HAVE HEALTH CARE, BETTER GAS MILEAGE FOR CARS. THE MAN WHO TREATED PEOPLE WITH RESPECT OR THE GUY WHO WAS IN A LOVING STABLE MARRIAGE? PERHAPS THE MAN WHO UNDERSTOOD THAT HE DIDN’T KNOW EVERYTHING AND DIDN’T “WING IT”. THAT PRESIDENT?

  • Paul

    Let them stand on their own merit and not a rebate tax incentive.

  • designer_dick

    The tax credit should definitely be eliminated on $100,000 Tesla Model S and X P100Ds, Jaguar’s i-Pace, Audi’s E-Tron, and probably on anything that has the word ‘Performance’ in it’s name, as those cars have no relation to affordability in any way, shape, or form. If you can comfortably afford the $60,000+ price of a Model 3 Performance after the tax credit has been applied, you probably didn’t need the tax credit in the first place.

    It should, however, be kept in place (temporarily) for cars that are on the cusp of being truly affordable to the mass market, such as the Nissan Leaf, Kia Niro EV, Hyundai Kona Electric and Chevrolet Bolt, until those cars have managed to become no more expensive than their ICE powered alternatives.

    • DM

      Totally agree. These days the words “Hybrid” and “electric” don’t apply only to cars for the masses. Luxury cars and supercars are going electric and not necessarily to be environment-friendly.

      • designer_dick

        Yeah, I don’t think Pininfarina decided to give the Battista four electric motors, a 120kwh battery and 1,900 horses in order to save the world.

  • kachuks

    Somebody give me $7500 and I’ll use it towards a very nice $13-$15k used vehicle. Oh wait, nobody is going to do that for me.

  • Dude

    So you can except a private jet but not an electric car? That makes sense.

    • MarketAndChurch

      I didn’t know that there was a tax credit given to private jet builders. That subsidy needs to stop.

  • TheBelltower

    Sure. And let’s end the billions in annual oil subsidies too. Unlike oil subsidies that go towards one of the most profitable industries in the world, a least the EV incentives allow buyers to keep more of the money they earn in their own pocket.

    • Arthur Burnside

      Yeah, right – those profiitable oil companies have produced the lowest fuel prices in decades. Apple is 10 times more profitable than any oil company and produces one of a dozen cell phones.

      • TheBelltower

        You can’t be honestly be serious with that comment. At least I hope not.

  • Alduin

    These tax credits for EV’s is a scam and always has been. End them now! Raise taxes on the rich too.

    • cooper

      Do yourself a favor and look up the billions give to oil companies in tax breaks.

      • Alduin

        I like oil. How do you recycle batteries? What happens when your battery is completely depleted in your EV? How do you dispose of it properly?

        • Dark-Fx

          Do yourself a favor and look up how battery recycling works?

          • Alduin

            EV’s are going to be disposable appliances.

          • Alduin

            I know how recycling works idiot. I’m talking about the environmental aspect and impact of batteries in the environment.

          • Dark-Fx

            “How do you recycle batteries?” “I know how recycling works” These mean opposite things. People aren’t going to just dump the battery into the trash out of their car when it’s beyond useful range in a car. It still has an extremely useful life as stationary storage, probably even longer than the useful life it had already spent in a vehicle. The vast majority of lead acid batteries get recycled, the same is going to be said for ones that come out of EVs, but there just isn’t that many of them that need to be recycled yet. You’re worried about the environmental impact of recyclable batteries but have no issues burning a non-renewable resource on a daily basis.

          • Alduin

            Lithium isn’t a renewable resource. HFC is going to be the next big thing in renewable energy.

        • cooper

          I like oil. How do recycle batteries?
          No IQ taken to post in this site I see.

          • Alduin

            Read my post again idiot I said how do you recycle batteries not “how do recycle batteries” moron.

      • Arthur Burnside

        Wrong oil companies receive a pittance compared to renewables and EV credits and those breaks allow for greater production and lower prices. Renewables result in much higher prices for power.

        • Alduin

          Cooper is an idiot,probably a leftist too,don’t even bother talking to the low IQ moron.

    • S3XY

      Stop being poor

      • Alduin

        Stop sucking Elon Musks D|ck.

  • SteersUright

    well said. a prius is exponentially cleaner and more efficient than 90% of cars on the road, just imagine how broad use of them would impact air quality, etc. That said, hybrid tech is largely well understood, the subsidies are mean to encourage and spur along the otherwise unprofitable development of brand new tech and infrastructure. Government has long had a hand in spending to advance science and technology, and I’m still a believer that they should. There are far larger federal misspending transgressions in the way of purely lining the pockets of corporations who yield great lobbying power. At least these subsidies also do some real good for society as a whole, even if you are right about you suggestion that propping up hybrids might be more prudent than EV’s, and I do think you are.

  • DMax

    Impeach Drumpf already!!! AOC for president 2020!!! Green new deal will save us all!!!

    • Arthur Burnside

      What a dope – Elon Musk wants to eliminate the tax credit, which never made any sense before, and with EVs selling for the same average porice as gas engines, makes even less sense now.

    • Arthur Burnside

      Green new deal could only be proposed by a certifified ignorant jerk like AOC. $93 trillion dollars to accomplish absolutely nothing – would have an almost insignificant effect on global warming. The same thing could be accomplished by utilizing cutting edge power technology of molten salt nuclear reaactors, a device i’m sure the braindead AOC knows nothing about – $800 billion would eliminate all CO2 power generation emissions. AOC’s New deal would cost at least 11 times more and bankrupt the country and install unreliable junk technology like bird butchering wind turbines ,which have a geographic footprint 10000 times larger than MS NRs and last 20% as long before needing repllacementt. Yeah, let’s all elect AOC and destroy out country.

      • Stephen G

        i KNOW RIGHT! How can anybody take a stand for clean air and stopping pollution. What a *ITCH!

  • Arthur Burnside

    Great news for Tesla. Elon Musk has been campaigning for the elimination of the tax credit, which was welfare for the well-heeled. Tesla is losing their tax credit and would be at a severe disdvantage selling against automakers who still have $7500 tax credits.

  • Arthur Burnside

    I’m amazed at how stupid these tax credit supporters are – they mostly allow automakers to charge higher prices – look at the higher than sticker prices being charged for the new Hyundai SUV electrics. And what obscene jerk wants to provide millionaire owners of $120,000 Tesla Model S cars with a $7500 tax credit, paid by MacDonalds workers?

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