The US government is one step closer to making EVs up to $12500 cheaper for buyers

Electric Vehicle
  • The Senate Finance Committee advanced a bill that would create bigger tax incentives for EV buyers.

  • Consumers could get up to $12,500 back if they buy a US-made EV built by unionized workers.

  • Under the new law, cars from Tesla and GM would qualify for tax credits again.

  • See more stories on Insider’s business page.

The US government is one step closer to making a new electric vehicle significantly cheaper.

The Senate Finance Committee on Wednesday advanced the Clean Energy For America Act, a piece of legislation that – if passed by the House and Senate – would expand and enhance tax credits available to EV buyers and introduce other other clean energy incentives.

The $259.5 billion package includes $31.6 billion in incentives for buyers of electric cars. It would overhaul and streamline the current “hodgepodge” of 44 clean energy tax credits, said Sen. Ron Wyden, chair of the committee.

The current 30D credit refunds up to $7,500 at tax time to buyers of battery EVs and plug-in hybrid EVs. Cars from both Tesla and General Motors don’t qualify for the program anymore because both companies have sold more than 200,000 such vehicles, the threshold under the current law.

Wyden’s bill eliminates the 200,000-unit threshold and beefs up the incentive, adding $2,500 for vehicles built in the US and another $2,500 for vehicles built by unionized workers. That would mean consumers could get $12,500 off of certain EV purchases. Vehicles would have to retail for less than $80,000 to qualify.

Read more: The only way to kill gas-powered cars is if you pay people to buy electric cars. Here’s why Cash for Clunkers 2.0 makes sense.

The plan also expands tax credits for commercial EVs and would begin phasing out once 50% of new cars sold in the US are electric or fuel-cell vehicles.

Wyden hopes the bill will be included as part of a larger infrastructure package that the White House is trying to pass. After receiving a 14-14 vote, the legislation can advance to the Senate floor.

“As we move forward with President Biden’s jobs and infrastructure agenda, our bill should be the linchpin of our efforts on clean energy,” Wyden said in a statement.

Aiming to advance three main goals – clean energy, clean transportation, and energy efficiency – the bill also creates incentives for electricity production, fuel production, and efficient homes and buildings.

It comes as President Biden is working with Congress to push through a version of his $2.2 trillion American Jobs Plan, which directs funds toward a wide range of infrastructure improvements, including $174 billion for EVs and EV charging. Senate Republicans proposed a $928 billion counteroffer on Thursday that includes $4 billion for EVs.

Read the original article on Business Insider


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