Congress Saves $7,500 EV Tax Credit Following Full-Court Pressure

As part of the last-minute tax bill discussions in Congress, the $7,500 federal tax credit for electric vehicles appears to have been saved. According to multiple reports, both the House and the Senate have agreed to keep the provision – often derided by Republicans. As the two houses of Congress have been finalizing their bill, the House version of the bill wanted to eliminate the federal EV tax credit (the Senate did not), which was seen as a potential major problem for the EV industry.

On Wednesday, over 50 companies lead by CALSTART, a national non-profit consortium of over 175 companies focused on clean and affordable transportation technology solutions, signed a letter urging Congress to keep the tax credit. They said it was vital since, "it spurs U.S. job creation and U.S. leadership in the electric vehicle sector."  The companies said that the Department of Energy estimates that there are  over 215,000 jobs in the U.S. that are devoted to "electric drive vehicle and component manufacturing."

The CALSTART mission follows a similar effort lead by mayors around the U.S.:

Securing America's Future Energy (SAFE) & Electrification Coalition (EC) worked in collaboration w/ City of Atlanta to recruit 22 mayors from cities across USA to sign a joint letter in support of the federal electric vehicle (EV) tax credit. https://t.co/EnBGQ9AgIj pic.twitter.com/MJ0AnfkKwS

— EVWORLD.COM (@evworldeditor) December 7, 2017

EV advocacy group Plug In America also worked on a grassroots effort to get people to pressure their Senators to leave the EV tax credit alone. PIA even wanted Congress to increase the credit, not get rid of it:

Abruptly ending the $7,500 federal tax credit for EVs will be catastrophic for the electric car market, as EVs make up less than 1% of light-duty vehicle sales in the U.S. This federal tax credit is a key incentive that helps consumers make the switch to driving electric. Abruptly ending the credit this December will rock these purchase decisions. This is absolutely terrible, as new makes and models of EVs will become available to more than 40% of the total U.S. car market in January 2018 thanks to clean air regulations that require the automakers to sell more EVs.

This credit already has a cap on when it will expire – when each automaker has sold 200,000 EVs. There's absolutely no need to end the credit now as part of the House or Senate tax reform legislation. If anything, for all the benefits that EVs provide – fuel savings for consumers, technology and innovation leadership in the U.S., electric grid benefits, clean air, reduced healthcare costs, improved national security – Congress should be talking about an extension or expansion of the credit.

We shall see where things end up, but for now, it appears EV fans can breathe a little sigh of relief.