Details of House EV Tax Credit Proposal

New EV tax credits will happen but the House and Senate versions must get reconciled.

On Friday, the US House has details in its proposed EV tax credits.

The current EV tax is a $7,500 tax credit for the first 200,000 electric vehicles per manufacturer. Tesla has built more than 200,000 EVs. The new EV program will run two years past the point when 50% of all new cars are electric.

Remove the 200,000 vehicles per manufacturer cap
Keep the $7,500 incentive for new electric cars for 5 years
Make the $7,500 incentive a point-of-sale discount instead of tax credit
EVs with battery pack smaller than 40 kWh are limited to a $4,000 incentive
Add an extra $4,500 for EV assembled at union factories
Add $500 for EVs using battery packs with 50% of components (including cells) are made in the US
After the first 5 years, the $7,500 becomes only for US-made electric vehicles and it applies for another 5 years.

Price limits on the EVs eligible for the incentives:
Sedans under $55,000
SUVs under $69,000
Pickup trucks under $74,000
Vans under $54,000

Credits only for those with an adjusted gross income of up to $400,000 for individuals and up to $800,000 for joint filers.

Last month, the Senate in a non-binding amendment narrowly voted in favor of prohibiting taxpayers from claiming EV tax credits if they make more than $100,000 annually or if vehicles cost more than $40,000.

Tesla EVs would get $8,000 tax credits under this plan.

I think the expanded EV tax credit proposal will pass in 1-3 months. The US wants to ensure they are a major player in the future auto industry. The future auto industry will be all electric. The $4500 advantage for Ford, GM and Stellantis will not save them. They currently have a $7500 tax credit advantage.

SOURCES- Reuters, Electrek
Written By Brian Wang, (Brian has shares of Tesla)

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