CEOs from American carmakers are urging Congress and the Biden Administration to lift the EV tax credit cap.
Top executives from General Motors, Ford, Chrysler (Stellantis), and Toyota lobbied Congress to lift a 200,000 vehicle count cap on the $7,500 electric vehicle tax credit citing higher costs to produce zero-emission vehicles, according to a letter seen by Reuters.
A manufacturer’s vehicles are eligible for up to $7,500 in Federal tax credit incentives until that manufacturer hits a benchmark of 200,000 vehicles sold. Both GM and Tesla have already hit the cap, so buyers of their electric products are no longer eligible to receive the $7,500 incentive.
“We ask that the per-(automaker) cap be removed, with a sunset date set for a time when the EV market is more mature,” the automakers said in a joint letter, as reported by Automotive News. “Recent economic pressures and supply chain constraints are increasing the cost of manufacturing electrified vehicles which, in turn, puts pressure on the price to consumers.”
The letter comes amid growing concerns among auto industry executives that the window is closing for US Congress to extend electric vehicle tax credits before the coming mid-term elections. For what it’s worth, Tesla seems to be doing just fine without the benefit of the Federal tax credit, having sold more EVs than the brands mentioned here by an order of magnitude already in Q1.
- Tesla Model Y………………………………..52,051
- Tesla Model 3………………………………..47,682
- Tesla Model S…………………………………9,250
- Ford Mustang Mach-E…………………..6,957
- Hyundai Ioniq 5…………………………….6,265
- Kia EV6…………………………………………..4,901
- Tesla Model X………………………………..4,899
- Nissan LEAF………………………………….4,401
- Kia Niro Electric……………………………3,549
- Volkswagen ID.4……………………………2,926
US consumer EV sales, Q1 2022; via Experian.
US Senator Joe Manchin (D., WV), questioned the need to extend EV tax credits in the face of strong consumer demand and lower costs associated with overseas production of battery components. “There’s a waiting list for EVs right now with the fuel price at $4,” he said, back in April. “But (carmakers) still want us to throw $5,000 or $7,000 or $12,000 credit to buy electric vehicles? It makes no sense to me whatsoever … when we can’t produce enough product for the people that want it and we’re still going to pay them to take it— it’s absolutely ludicrous in my mind.”
What do you guys think— do carmakers really need that Federal tax credit to ease the transition to EVs, or are market forces like high gas prices and changing attitudes towards working from home big enough trends to keep the EV market humming along? Scroll on down to the comments and let us know!
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