The US federal government is currently considering the increase in electrification investment as part of a large-scale infrastructure bill.
It is not yet clear how the money will be used, but we now hear that the electric vehicle tax credit may increase to $10,000.
Last week, the Biden administration released the outline of its infrastructure plan, which included a summary of planned electrification investments of $174 billion.
As part of the summary, the government confirmed that they plan to reform the electric vehicle incentive program, which today includes a tax credit of $7,500 for new electric vehicles, with a limit of up to 200,000 vehicles per manufacturer.
However, the summary is still vague about the reform-only confirming that the reform will not only take the form of tax rebates, but will also use “Point of sale rebate“, will now be used for “Electric cars made in the U.S.. “
In the past few months, since Democrats have occupied a majority of seats in the federal government, they have proposed several new reforms to the electric vehicle incentive program to remove the 200,000 unit limit per manufacturer.
Some Democrats introduced the Current Renewable Energy and Efficiency Growth Act (GREEN) to reform the plan.
In short, automakers that have reached this threshold will receive a new tax credit of $7,000 for the purchase of 400,000 electric vehicles until the new phase-out phase begins again.
Another bill was also proposed, called the “Electric Vehicles Act”
This will also allow buyers to apply credits at the time of purchase, rather than through tax credits, but it can also be achieved through tax credits, which can be done within five years if needed.
The Electric Vehicle Law seems to be closer to what was announced in the summary of the infrastructure plan, but it is not yet clear what will actually become law.
Now, Wedbush analyst Dan Ives is one of the top analysts tracking the electric vehicle market. He said the rumor in Washington was that the new incentives would be $10,000.[via[viaYahoo Finance]:
We heard from contacts on the Ring Road that the $7,500 tax credit may be $10,000 in terms of credit, which is a huge catalyst not only for Tesla but also for the U.S. EV ecosystem.
If the rumors are true, then it may greatly accelerate the sales of electric vehicles in the United States.
Ives said that this will be a “huge catalyst” for Tesla and others in the U.S. electric car industry, but I think Tesla will be the biggest winner so far.
We must keep in mind that Tesla is now the largest seller of electric vehicles in the United States, even though its buyers did not receive the $7,500 tax credit, which most competitors can.
I can’t imagine what kind of potential customers they will be able to build if they not only get a return visit opportunity, but also increase the incentive to 10,000 US dollars.
However, I have to think that the reform will also limit the sales price of electric vehicles.
I haven’t discussed a lot of things recently, but it has also been done in many other markets that offer incentives for electric vehicles, including Canada.
The $45,000-$50,000 cap can make the situation more balanced while still having a very positive impact on US EV demand.
What do you think? Let us know in the comments section below.
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