Vermont Congressman Peter Welch has filed a bill to extend federal electric-car tax credits for 10 more years, just as the credits begin to run out on the two largest electric-car manufacturers, Tesla and General Motors.
Both Tesla and General Motors are expected to reach their cap of 200,000 electric car sales in 2018. Tesla may already have.
The way the tax-credit law is written, after each automaker sells 200,000 electric cars, the credits for that automaker’s cars begin to phase out.
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The sales are counted by quarter. Once an automaker sells 200,000 plug-in cars, buyers can continue to claim the full credit for the rest of that quarter and one more quarter thereafter. After that, buyers who purchase cars in the next six months can claim a half-credit, and buyers for six months after that can claim a quarter of the full credit. After that, the credits for that automaker’s cars disappear entirely.
Those who buy electric cars from other automakers could still claim the full credit.
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Offering such generous tax credits to wealthy buyers of expensive Teslas has been controversial, and more several more electric cars are on the way from other luxury automakers this year.
Welch’s bill would eliminate the 200,000-unit cap and extend the credits to an unlimited number of plug-in cars for the next 10 years. It would also reinstate credits for buying home charging stations for electric cars, which expired at the end of 2017.
The bill is on its way to the House Ways and Means Committee. It has two Democratic co-sponsors but no Republican support. Parallel legislation sponsored by Democratic Senator Jeff Merkey, is expected to be introduced in the Senate.
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