$100K earn­ers ben­e­fit most from elec­tric ve­hi­cle cred­its

Lodi News-Sentinel - - SPORTS - By David Lightman

WASH­ING­TON — Across the coun­try, tax breaks for own­ers of elec­tric ve­hi­cles have largely gone to peo­ple with six-fig­ure in­comes.

With a dossier full of that kind of in­for­ma­tion as am­mu­ni­tion, pow­er­ful op­po­nents of ex­pand­ing the credit are mo­bi­liz­ing.

“The EV tax credit is no longer nec­es­sary,” Sen. John Bar­rasso, chair­man of the Sen­ate En­vi­ron­ment and Pub­lic Works Com­mit­tee, wrote ear­lier this month in a let­ter to Sen­ate Ma­jor­ity Leader Mitch McCon­nell.

Auto in­dus­try in­ter­ests and clean-en­ergy ad­vo­cates have been press­ing to ex­pand the credit that cur­rently gives elec­tric ve­hi­cle own­ers up to $7,500 per qual­i­fied ve­hi­cle, which is be­gin­ning to phase out un­der cur­rent law. But the mood in the U.S. Sen­ate ap­pears to be shift­ing in the op­po­site di­rec­tion.

Sen. Chuck Grass­ley, the pow­er­ful chair­man of the tax-writ­ing Sen­ate Fi­nance Com­mit­tee, “has se­ri­ous con­cerns about ex­pand­ing this ex­ist­ing tax credit, which pri­mar­ily ben­e­fits up­per-in­come in­di­vid­u­als who likely can al­ready af­ford elec­tric ve­hi­cles,” spokesman Michael Zona said.

The Trump ad­min­is­tra­tion pro­posed end­ing the credit this year, part of its ef­fort to end sub­si­dies for sim­i­lar items, no­tably re­new­able en­ergy sources.

The ex­pan­sion ef­fort is be­ing pushed by a group of House and Sen­ate law­mak­ers, in­clud­ing some Repub­li­cans, who have long pro­moted clean en­ergy, backed by environmen­tal groups, auto in­dus­try in­ter­ests and others.

A key goal is to spur pro­duc­tion so it reaches a level where it’s more ef­fi­cient and less costly to pro­duce the ve­hi­cles.

With the credit, “we’re kind of get­ting to where we need to be,” Rep. Dan Kildee, a Michi­gan Demo­crat who’s help­ing to lead the ex­pan­sion ef­fort, told McClatchy.

He has the sup­port of some pow­er­ful Democrats who run the House, and one of their hopes is that the credit winds up in a catch-all tax cut bill later this year.

The ma­jor fed­eral tax break for qual­i­fied plug-in elec­tric ve­hi­cles was first en­acted in 2008. It ranges from $2,500 to $7,500 per ve­hi­cle bought af­ter Dec. 31, 2009. It be­gins to phase out when at least 200,000 qual­i­fy­ing ve­hi­cles per man­u­fac­turer have been sold for use in the U.S.

Tesla passed the thresh­old last year, and since July 1, the credit on its el­i­gi­ble ve­hi­cles has been re­duced to $1,875. Next year, no credit will be avail­able on el­i­gi­ble Tes­las.

Credit for buy­ing el­i­gi­ble Gen­eral Mo­tors ve­hi­cles is also be­ing phased out. In April, the In­ter­nal Rev­enue Ser­vice re­ported that GM had sold more than 200,000 to­tal el­i­gi­ble ve­hi­cles dur­ing the last quar­ter of last year, trig­ger­ing the phase­out. Since Oct. 1, the credit has been re­duced to $1,875 per GM ve­hi­cle, and af­ter March 31, 2020, no credit will be avail­able.


The Volk­swa­gen ID.3, which the au­tomaker in­tro­duced at IAA 2019 in Frank­furt, is its first model on its MEB prod­uct line for elec­tric ve­hi­cles.

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