Last week, House Republicans revealed comprehensive tax reform legislation, H.R.1, which, as of press time, includes a repeal of the Section 30D Plug-in Electric Drive Vehicle Credit. Given that the bill is subject to change and far from becoming law, electric transportation and clean energy advocates have vowed to fight for the electric vehicle (EV) tax credit.
As an official summary of H.R.1 explains, “Under current law, a taxpayer may claim a credit for each qualified plug-in electric-drive motor vehicle placed in service. A qualified plug-in electric-drive motor vehicle is a motor vehicle that has at least four wheels, is manufactured for use on public roads, meets certain emissions standards (except for certain heavy vehicles), draws propulsion using a traction battery with at least four kilowatt-hours of capacity, and is capable of being recharged from an external source of electricity. The maximum credit is capped at $7,500 regardless of vehicle weight. In addition, after that date, no credit is available for low-speed plug-in vehicles or for plug-in vehicles weighing 14,000 pounds or more. The total plug-in vehicle limitation is 200,000 plug-in vehicles per manufacturer. The credit phases out over four calendar quarters beginning in the second calendar quarter following the quarter in which the manufacturer limit is reached.”
The bill’s provision repealing the EV tax credit “would be effective for vehicles placed in service for tax years beginning after 2017.”
The Electric Drive Transportation Association (EDTA) is calling on people to reach out to their members of Congress and has expressed its “strong disappointment and concern” about the “premature termination” of the “critical” incentive.
In a letter to the bill’s sponsor, House Ways and Means Committee Chairman Kevin Brady, R-Texas, the trade group asserts that “a reformed tax code should include a robust set of incentives to support the electrification of transportation.”
According to EDTA, “The Section 30D credit is working as intended to promote the deployment of plug-in electric drive vehicles by multiple vehicle manufacturers and ensure that the United States leads, rather than follows, in this critical advanced technology.
“Nearly 700,000 plug-in vehicles have been sold since entering the market in 2010. Consumers now have more choices than ever to drive electric, with offerings of diverse sizes, price points and capabilities – including battery electric vehicles (BEVs), plug-in hybrids (PHEVs) and fuel cell electric vehicles (FCEVs),” the letter continues.
“Close to 40 models of plug-in and fuel cell cars are available to American drivers, and options are expected to grow exponentially in the next three years. Every major automaker in the U.S. now has at least one plug-in vehicle in the market, and nearly all have announced plans for major investments in expanding electric offerings.”
The group notes, “The Section 30D credit does not expire under current law; it phases out on a per-manufacturer basis over the calendar year following the calendar quarter in which a manufacturer sells its 200,000th qualifying vehicle. This construction was intended to promote multiple manufacturers’ investment and to allow the plug-in electric
drive vehicle manufacturers to achieve commercial-scale production and the attendant reductions in per-unit costs.”
Furthermore, EDTA says, “Federal policies that reinforce industry and consumer investment in electric transportation are critical to realizing these benefits.”
Various environmental and clean energy groups have voiced their opposition to the bill, which, in addition to proposing a repeal of the EV tax credit, also takes aim at renewable energy incentives.
For example, Michelle Robinson, director of the Clean Vehicles Program at the Union of Concerned Scientists, says in a statement, “It’s a mistake for House leaders to target electric vehicles and renewable energy in this tax bill. These provisions show how little concern the authors of this bill have for the real-world consequences of their proposals.
“Electric vehicles are a new industry, and the electric vehicle purchase incentive has been a vital part of getting it off the ground,” continues Robinson. “We should keep these incentives in place to make sure that more drivers can take advantage of the benefit of driving electric. Instead, this bill would drop the incentives completely and immediately, throwing the market into disarray.”
Ana Unruh Cohen, director of government affairs at the Natural Resources Defense Council, says in a separate statement, “House Republican tax writers are bent on padding polluter profits, leaving us to pay the price. Their plan barely touches huge tax giveaways for fossil fuels. But it would zero-out cost-effective electric vehicle tax credits and weaken tax credits for wind and solar that are creating jobs, spurring innovation, meeting consumer demand and cleaning up the air. That’s reckless. Congress should put clean energy back in the driver’s seat, for the good of our communities, economy and future generations.”
To learn more about the renewable energy aspects of the proposed legislation, check out an analysis published on NGT News‘ sister website Solar Industry here.