Future of EV incentives unclear in 2023

Companies brace for pushback from GOP-led House

Automakers have long relied on incentives to bolster the electric-vehicle market. With Republicans now set to take control of the U.S. House of Representatives next year, the industry isn’t so sure it can count on those perks much longer.

The Republican takeover of the House could potentially imperil initiatives from EV credits to funding for charging stations passed in recent years by Democrats, who retained control of the U.S. Senate in last week’s elections. Even if lawmakers don’t actively undo incentives, they could still let some programs phase out.

Prominent conservative lawmakers who are likely to play outsized roles in national debates under the coming Republican-led House like Georgia Representative Marjorie Taylor Greene have derided the Biden administration’s push to accelerate the transition to electric cars. In an October campaign appearance in Michigan, Greene accused Democrats of wanting to “emasculate the way we drive and force all of you to rely on electric vehicles.”

Automakers are bracing for changes under a GOP-led House but aren’t likely to overhaul their positions, industry leaders say, particularly as new EV plants and jobs garner increasing support from lawmakers on both sides of the aisle.

Here are some key programs that could be in line for changes following the election:

• Charging stations. Since President Joe Biden took office, Congress has appropriated $7.5 billion for electric-car charging stations, down from an initial request of $15 billion. Carmakers argue more is likely to be needed to convince consumers to go electric, but the prospects of more money from a GOP Congress are unclear.

• Consumer tax credits. Automakers have been pushing the federal government to ease restrictions that limit the $7,500 credits for consumer purchases. Under a new law, the credits are only applicable to cars where the battery materials are sourced from the U.S. and certain countries. Since China is a key provider of these materials, the industry is concerned that many of their U.S. car models won’t qualify. Republicans have historically opposed the tax credits, arguing they’re a giveaway for rich Tesla Inc. car buyers.

• Used car incentives. Under a new law, used EVs will qualify for the tax credit for the first time. A $4,000 credit for some cars will become available after Dec. 31 for buyers with income under certain thresholds. Also for the first time, starting in 2024, consumers who buy new or used clean vehicles at registered dealers would be allowed to receive discounts at the point of sale equal to the value of their credits. The tax credits are set to last for 10 years, unless new congressional leaders move to repeal them early.