As lawmakers continue to work on comprehensive tax reform, one item related to the automotive industry on the table was the tax credit for electric vehicles. The credit, which can be up to $7,500, was dropped in the House version of the bill but kept in the Senate version. The credit was started in 2009 as part of the economic stimulus package as a way to encourage investment by auto manufacturers in the development of electric powered or assisted vehicles. The the current version of the bill in reconciliation keeps the credit. Analysts estimate that scrapping the credit would save $200 million over the next 10 years.
The credit is capped at 200,000 qualifying vehicle per manufacturer, which no automaker has yet reached. Most manufacturers have announced billions of dollars in investment for sweeping changes to their lineups with many models gaining plug-in hybrid variants over the next 5 to 7 years.
Related: GM Launching 20 EVs by 2023