Sales of electric vehicles continue to grow but they could become less appealing in the future as the House Ways and Means Committee has revealed the Republication tax plan would eliminate the federal tax credit for electric vehicles.
As Bloomberg and Automotive News are reporting, the proposed bill would eliminate the credit after the 2017 tax year. The move could cause some consumers to reconsider electric vehicles, especially mainstream ones such as the Chevrolet Bolt which starts at $37,495 but costs just $29,995 after the credit is applied.
The tax credit was introduced several years ago and was designed to lower the purchase price of electric vehicles by between $2,500 and $7,500 depending on the size of the vehicle and its battery capacity. The tax credit was slated to remain available until an automaker sold 200,000 eligible electric vehicles. No company has achieved this feat so far but Tesla was reportedly getting pretty close.
Phasing out the tax credit could prove disastrous to electric vehicle sales and a spokesperson for the Alliance of Automobile Manufacturers stated “There is no question that the elimination of the federal electric vehicle tax credit will impact the choices of prospective buyers and make the electric vehicle mandate in 10 states — about a third of the market — even more difficult to meet.”
Most automakers have declined to comment on the proposed bill but General Motors has vowed to fight it as the automaker said the tax credits are “an important customer benefit that can help accelerate the acceptance of electric vehicles.”
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