Consumers receive a $7,500 tax credit when they purchase a qualifying electric vehicle, but the credit phases down to $3,750 after a manufacturer sells 200,000 vehicles. On July 1, it will be reduced to $1,875.
Many U.S. electric vehicle manufacturers have already hit this cap, leaving buyers with a smaller pool of vehicles with tax credits to choose from. Fewer consumer options result in less innovation, fewer new models, less consumer attention. Ultimately, this slows the shift to an electric vehicle fleet that California must make to address climate change because 80 percent of our carbon emissions come from passenger vehicles.
To improve air quality and make the electric vehicle tax credit work better for consumers, Congress must lift or eliminate the cap. Lifting the cap will let innovations ramp up, and cars will become more affordable. Congressional inaction will risk hundreds of thousands of jobs.
Tell Congress it’s time to reform the federal electric vehicle tax credit now!
Estimates show that by 2040, more than half of all vehicles sold worldwide will be electric. If Congress fails to lift the cap, electric vehicles with the best battery range soon will not qualify for the tax credit. A stable electric vehicle market will encourage growth of the charging infrastructure industry.
Silicon Valley has long prided itself on its ability to build toward the future. The Silicon Valley Leadership Group has joined the Electric Vehicle Drive Coalition, a diverse partnership of industry, consumer and environmental stakeholders that include Leadership Group member companies ChargePoint, Cruise Automation, General Motors, Proterra and Tesla.
America cannot sit back and watch as countries around the world enact policies that encourage the research, development and adoption of electric cars on a large scale. The time to reform is now, to ensure that our automotive industry stays viable and competitive in the 21st century and beyond.
– Heidi Sickler, Director of Energy & Environmental at the Silicon Valley Leadership Group
