Automakers call on Congress to lift electric vehicle tax cap

NEW YORK (AP) — Major automakers are calling on Congress to lift the cap on how many people can get tax credits for buying a hybrid or all-electric vehicle.

Currently, the number of authorized tax credits is capped at 200,000 per company. General Motors and Tesla have already reached the milestone and Toyota is close.

In a letter to Senate and House of Representatives leaders on Monday, the chief executives of Ford, Toyota, GM and Stellantis called for tax credits to be given to anyone wishing to purchase a qualifying vehicle.

Automakers want the cap lifted until “the market for electric vehicles is more mature”, they said, without giving a time frame.

“Removing the cap will incentivize consumers to embrace future electrified options and provide much-needed certainty to our customers and the national workforce,” the CEOs wrote.

The request comes as Americans find themselves financially pinned down on all sides by high inflation for four decades. Energy prices have been particularly bad, with the average cost of a gallon of gasoline in the United States exceeding $5 this weekend, according to the AAA automobile club.

Automakers said on Monday that the tax credit has allowed them to offer more affordable cars to people, helping to accelerate the adoption of electric vehicles. However, the companies said recent economic conditions and supply chain constraints have increased the cost of manufacturing electric vehicles and that these costs must be passed on to car buyers who are already paying more for almost everything.

President Joe Biden has tried to ensure that the supply of materials needed to produce electric vehicles continues to flow as the country moves away from fossil fuels.

Biden in April invoked the Defense Production Act of 1950 to boost production of lithium and other minerals essential to power electric vehicles.

Toyota’s RAV4 Prime small plug-in SUV with 42 miles of electric range nets the buyer a $7,500 credit, the largest available. The Prius Prime plug-in, with 25 miles of electric range, gets $4,500.

The letter was signed by GM CEO Mary Barra, Toyota CEO Ted Ogawa, Ford CEO Jim Farley, and Stellantis CEO Carlos Tavares.

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Post expires at 1:55am on Friday June 24th, 2022