Investor's Corner

Tesla could get tax credits for 400k more cars thanks to bipartisan bill

A new Tesla and electric car-friendly bill is expected to be introduced by a bipartisan group of US lawmakers this Wednesday. Dubbed as the “Driving America Forward Act,” the bill aims to grant each automaker a $7,000 tax credit for an additional 400,000 vehicles, which will be counted on top of the 200,000 cars covered by the existing $7,500 tax credit.

The bill boasts sponsors from both sides of the aisle, including Democratic Senators Debbie Stabenow and Gary Peters, Republican Senators Lamar Alexander and Susan Collins, as well as Democratic Representative Dan Kildee. At a dinner last week, Stabenow argued that the existing cap for electric vehicle tax credits needs to be adjusted in the quickest time possible. “We have a cap that’s got to go up. I want to get this done as soon as possible,” the senator said.

It’s not just pure electric cars that will be covered by the Driving America Forward Act, as the bill also aims to extend the hydrogen fuel cell credit through 2028. While the phaseout period of the bill is shorter at just nine months, its 400,000-vehicle window holds great potential for boosting electric car sales in the United States.

Estimates note that the bill is estimated to cost $11.4 billion. As noted by Reuters, all but $91 million of the total funding will be used for the $7,000 tax credit.

The Driving America Forward Act is backed by several automakers, including electric car pioneer Tesla, American automakers GM, Ford Motor Co, and Fiat Chrysler Automobiles NV, Japanese automakers Toyota Motor Corp, Honda Motor Co, and Nissan Motor Co, as well as German carmakers BMW AG and Volkswagen AG. In a statement, GM President Mark Reuss expressed his support for the bill. “The EV tax credit provides customers with a proven incentive as we work to establish the U.S. as a leader in electrification,” he said.

While the bill enjoys widespread support from automakers, environmental groups, and other organizations, it will likely face opposition from the White House. Last month, the Trump administration proposed the immediate elimination of the $7,500 tax credit. Senator John Barrasso, a Republican who chairs the Environment and Public Works Committee even proposed a legislation back in February that will impose a highway user fee on electric vehicles.

Tesla could get tax credits for 400k more cars thanks to bipartisan bill
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