Automakers Battle Big Oil to Keep Electric Vehicle Tax Credit

The federal tax credit for electric cars is pitting automakers against the oil and gas industry.

WASHINGTON–Automobile June 28, 2019; NACS online reported that auto makers are asking Congress to expand the federal tax credit for electric vehicles, triggering a battle between automakers and the oil and gas industry, the Washington Post reports.

On the behalf of automakers like General Motors, Rep. Daniel Kildee (D-MI) and Sen. Debbie Stabenow (D-MI) have introduced a bill that would increase the quota of tax credits to allow companies to sell three times as many EVs before the tax credits expire. Supporters of the measure say it would help the United States lower carbon dioxide emissions.

However, opponents view extending the tax credit as not fair to lower- and middle-class Americans who can’t afford EVs. “Regardless of whether you support the tax credit for electric vehicles or not, there is no denying taxpayers are overwhelmingly subsidizing Americans that can afford to buy their own car,” said Sen. John Barrasso (R-WY), who chairs the Senate Environment and Public Works Committee. “If you want an electric car, you can buy one—there are more available now than ever before.”

Currently, the federal government gives buyers a tax credit of $7,500 for the first 200,000 electric vehicles sold per company. Once that number is reached by a manufacturer, the tax credit is cut in half for EVs sold over the following six months. Then that number is halved again for another six months before it goes away completely. EV supporters want Congress to allow the full consumer tax credit for up to 600,000 vehicles from each manufacturer before the phase out starts.