Talking Tax Tax Credit Limit Looms Over Electric Vehicle Market
The electric vehicle market in the United States is reaching an inflection point as companies look to boost manufacturing at the same time that two more large automakers are on the verge of losing a critical consumer incentive.
The $7,500 electric vehicle tax credit begins phasing out at 200,000 vehicles sold per manufacturer, a threshold General Motors Co. and Tesla Inc. hit years ago. Ford Motor Co. and Toyota Motor Corp. are quickly approaching that sales milestone, which has automakers and EV advocates looking to Congress to step in.
Democrats remain interested in ways to expand the EV credit, but that effort is wrapped up in the Biden administration's stalled tax, climate, and social spending plan.
Ellen Hughes-Cromwick, a senior resident fellow for climate and energy at the think tank Third Way, is the guest on the latest episode of Talking Tax. Hughes-Cromwick—who previously worked at the Commerce Department and Ford—discusses growth in the electric vehicle sector, breaks down the argument for expanding the federal tax credit, and explains what it will take to create a market for used EVs.
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