The Tax Credit Currently In Effect For Electric Vehicles Is In Danger Of Being Repealed
Currently, there is a tax credit of $7,500 for each electric car purchased. This increased the sales of electric cars in the United States, and may be repealed at the end of 2017. This is due to a proposed bill by the House Republicans as part of an overhaul to the tax code. Despite the fact the tax credit enabled many consumers to afford an electric car, the incentive may disappear.
The auto industry has been relying on marketing electric cars, and the implications are expected to impair sales of the Chevrolet Bolt and Nissan Leaf, two of the more affordable options. Even sales for the higher ticket models are expected to suffer. The tax credit is currently applicable to the first 200,000 cars each automaker sells, then decreases to $3,750 for the following six months. No automaker has currently reached the 200,000 mark, but General Motors and Tesla are close.
The automakers displeasure with the proposed bill is evident. General Motors stated the tax credit accelerated the consumers acceptance of electric cars, and is working with Congress to ensure the incentive is maintained. The incentive has allowed the automaker to sell electric vehicles, predominately those in the lower price range.
The future of electric vehicles may be in jeopardy if the electric vehicle incentive is repealed. This is expected to have the greatest effect on the $30,000 price range, and this includes the popular Tesla Model 3. The proposed repeal could not come at a worse time since many automakers are just recently becoming established in the production of electric vehicles.
Several new models are expected to be released by Mercedes-Benz, Toyota, and Volkswagen prior to 2020. Some of these vehicles are expected to be comparable to gasoline vehicles regarding pricing. Unfortunately, if the incentive is repealed it could have damaging effects on the sales of electric vehicles.