Tax Credit for EVs at $7,500 will be taken away by the U.S Government
You may soon be out of luck if you were looking to get the benefit of $7,500 from the U.S federal government tax credit in buying an electric vehicle. Bloomberg reported that the provisions in the U.S tax code may be terminated in the current round of tax cut efforts. It might affect the entire nascent industry by not supporting EV sales at a federal level. Bloomberg pointed out those 11 states, including New York and California, offer credits and rebates to help drive interest in the new technology. But, the larger federal tax credit for electric cars serves as major incentives for American people to buy them. The credit phases out after a manufacturer sells 200,000 cars. Bloomberg also reported that Tesla could be the first company to hit that limit.
GM and Nissan have sold quite a few electric autos. The credit doesn’t simply disappear, but each new buyer will get a successively smaller credit after reaching the limit. Still, keeping the bigger federal tax credit and it can only help car buyers in choosing electric vehicles for their next auto purchase. The Car-Lab president Eric Noble informed Bloomberg that now, the EV market isn’t driven by natural demand. If you eliminate the tax credit, then either the manufacturer eats it or sells fewer vehicles. The spokesperson of GM also informed Engadget via email to share the automaker’s perspective. They said that credits are an important customer benefit that can help accelerate the acceptance of electric vehicles. It is due to General Motors believes in an all-electric future and the company will work with U.S Congress to discover ways to maintain this benefit.