House Bill Would End $7,500 Electric Vehicle Tax Credit

Plan on buying an all-electric or hybrid vehicle? Make haste to your local dealer – a bill under consideration in the House would gut the $7,500 EV federal tax credit by December 31st.

The proposed bill by House Republicans would ax the EV federal tax credit to pay for a slew of tax cuts. As explained by Arstechnica, the credit works on a sliding scale – a plug-in hybrid with at least 5kWh battery capacity nets you a $2,500 credit, and every extra kWh adds another $417 up to a maximum of $7,500 (this only covers tax debts, though – the government won’t give you money).

And since the tax credit began on January 1, 2010, it was good for the first 200,000 qualifying vehicles sold per automaker. No one has hit that threshold yet, but the closest is GM, with 158,144 plug-in vehicles sold as of October. Tesla is close behind with 148,000+.

The automakers are … less than pleased with the proposed cuts. And like any politician worth their salt, they’ve cloaked their displeasure in altruism (instead of, you know, a cut to the bottom line).

"Tax credits are an important customer benefit that can help accelerate the acceptance of electric vehicles. Because General Motors believes in an all-electric future, we will work with Congress to explore ways to maintain this incentive," said GM.

"Nissan has made significant investments in the development of market-leading electric vehicles and public charging infrastructure to support EV drivers," said Nissan spokesman Brian Brockman. "We support continuing measures that help encourage greater adoption of EVs….”

For their part, the National Resources Defense Council’s Clean Vehicles and Fuels Project released their own statement:

“The EV tax credit repeal would cede U.S. leadership in clean vehicles, putting our companies at a competitive disadvantage and threatening jobs while costing drivers more at the pump and increasing pollution.”

Naturally, our economy is more diverse than just electric and hybrid vehicles, though, so this isn’t the full story….

What do you think? A long-overdue repeal that will stimulate the economy (via tax cuts)? Or a foolhardy move that will have unintended consequences?