Climate change bill ‘transformative’ for auto and energy industries

For the auto industry, one of the most important provisions of the climate bill would eliminate the cap on the number of cars from each manufacturer eligible for a $7,500 tax credit that taxpayers get for the purchase of electric vehicles. Currently, the credits are removed after a manufacturer has sold 200,000 electric or plug-in hybrid vehicles.

Restoring the credits would be huge for Tesla and General Motors, which have exhausted their quotas, as well as companies like Ford Motor and Toyota which will soon lose access to the credits. The new tax credit, available until 2032, would make vehicles from these companies more affordable and address criticism that only the wealthy can afford electric cars.

“A lot of middle-class Americans will be able to get this credit that otherwise would have been blocked because of the credit limit,” said Joe Britton, executive director of the Zero Emission Transportation Association, whose members include Tesla. as well as manufacturers of charging equipment, suppliers of battery materials and other companies related to the electric vehicle sector. “It’s a big problem.”

For the first time, used battery-powered cars would receive a tax break of up to $4,000. This is important because most people buy used cars, not new ones. The average price of a new electric car has topped $60,000, out of reach for many buyers despite the fuel and maintenance savings these vehicles provide.

Individuals earning more than $150,000 a year or couples earning $300,000 or more would not qualify for new electric car incentives. Income limits for the used car incentive are $75,000 for individuals and $150,000 for couples. The credits would not apply to sedans that sell for more than $55,000 and vans, pickups and sport utility vehicles listed for more than $80,000.

“They’re trying to drive adoption among middle-class and lower-class buyers, and that’s a good thing,” said Akshay Singh, a partner at accounting and advisory firm PwC, which specializes in lending. ‘automobile industry. “That’s where most of the market is.”