A bipartisan group of United States politicians have introduced legislation to expand the electric vehicle tax credit by 400,000 vehicles per manufacturer, a provision that would give a boost to Tesla and General Motors before existing credit comes to an end.
Democratic Senators Debbie Stabenow and Gary Peters, Republican Senators Lamar Alexander and Susan Collins and Democratic Representative Dan Kildee are sponsoring the bill.
Reuters Newsagency reports the bill could lift electric vehicle sales in a boost for carmakers that have committed tens of billions of dollars toward meeting global emissions requirements.
GM and Tesla shares rose on Reuters report that the bill would be introduced.
Supporters hope to attach the proposal to tax legislation that could be considered in the next few months.
The existing US$7500 EV tax credit, which allows taxpayers to deduct part of the cost of buying an electric car, phases out over 15 months once an carmaker hits 200,000 cumulative EV sales.
GM saw its tax credit cut to US$3750 on April 1 and Tesla’s tax credit fell to the same figure on January 1 and will end entirely at year’s end.
The bill dubbed the “Driving America Forward Act” would grant each carmaker a US$7000 tax credit for an additional 400,000 vehicles on top of the existing 200,000 vehicles eligible for US$7,500 tax credits.
It would shorten the phase-out schedule to nine months.
The bill would also extend the hydrogen fuel cell credit through to 2028.
The bill is estimated to cost US$11.4 billion, with all but US$91 million of that tally to extend the EV tax credit.
“We have a cap that’s got to go up,” Senator Stabenow told a group of carmakers at a dinner last week.
“I want to get this done as soon as possible.”
The proposal has strong backing from carmakers, environmental groups and others, but will face opposition.
Last month, the White House proposed immediately eliminating the US$7500 tax credit, a move it said would save the US government US$2.5 billion over a decade.
Senator John Barrasso, a Republican who chairs the Environment and Public Works Committee, in February proposed legislation to end the credit and impose a highway user fee on EVs to pay for road repairs.
The bill is backed by major carmakers including GM, Tesla, Toyota, Ford, Fiat Chrysler, Honda, BMW, Nissan, Volkswagen and utilities.
GM President Mark Reuss said in a statement “the EV tax credit provides customers with a proven incentive as we work to establish the US as a leader in electrification.”
Michael Brune, executive director of the Sierra Club, said “as we build and grow the clean energy economy, we must continue to invest in tackling the sector that generates the most pollution: transportation.”
Both GM and Tesla have been lobbying Congress for more than a year to extend or expand the EV tax credit.
GM’s credit drops to US$1875 in October and will completely disappear by April 2020, while Tesla’s credit falls to US$1875 in July and expires at the end of the year.
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