A number of automakers are urging Congress to lift the cap on the $7,500 tax credit for electric vehicles.
The letter from the CEOs of General Motors, Ford, Stellantis and Toyota North America called on Congress to abolish the current cap, which means the $7,500 tax credit is eliminated once a manufacturer sells more than 200,000 electric vehicles. Mary Barra, Jim Farley, Carlos Tavares and Tetsuo Ogawa said rising car prices made credit all the more important.
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“We are asking that the per (automaker) cap be removed, with a sunset date set at a time when the electric vehicle market is more mature,” the letter said. “Recent economic pressures and supply chain constraints are increasing the cost of manufacturing electrified vehicles, which, in turn, is putting price pressure on consumers.”
President Joe Biden has previously proposed raising the electric vehicle tax credit up to $12,500, but the provision that only vehicles made on union sites in the United States would receive a $4 incentive $500 sparked controversy. The president also backed a 30% credit for commercial electric vehicles, as well as a $4,000 tax credit for used electric vehicles.
Not all Democrats favor extending the tax credit. For example, West Virginia Senator Joe Manchin says it just doesn’t make sense.
“There’s a waiting list for electric vehicles right now with fuel prices at $4,” he said in April. “But they still want us to run a $5,000, $7,000 or $12,000 credit to buy electric vehicles. It makes no sense to me. When we can’t produce enough product for the people who want it and we’re still going to pay them to take it, that’s absolutely ridiculous in my mind.
Tesla and General Motors have already hit the 200,000 mark and their vehicles are no longer available with the full $7,500 tax credit. Ford and Toyota are expected to hit the 200,000 mark this year, Automotive News reports.