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White House Ready To Deploy Tools For Oil Price Control

White House Ready To Deploy "Tools" For Oil Price Control

The Biden administration stands ready…

New Tax Credit Proposal Could Lift Tesla, GM Stock

Nevada Senator Dean Heller has proposed lifting the tax credit ceiling for electric cars, Reuters reports, citing the text of the proposal, which has not yet been made public. If the proposal becomes a law, Tesla and GM will be among the biggest beneficiaries.

Under Sen. Heller’s proposal, electric car manufacturers could claim tax credits on more than 200,000 vehicles, which is currently the maximum for claiming maximum tax credit, after which the sum begins to taper.

Yet the Republican senator’s bill comes with a caveat: in exchange for raising the maximum number of cars eligible for tax credit of a maximum of US$7,500, all tax credits will be phased out in 2022.

Tesla earlier this year announced it had sold 200,000 cars, Reuters recalls, which immediately started the phase-out mechanism: for the following six months after the target was met, tax credits will be 50 percent lower. Over the next six months, it will be just US$1,875 per car. After that, the incentive ends.

GM will reach the 200,000 milestone by the end of this year, the company said earlier, telling Reuters that it was important “to provide a federal tax credit for consumers to help make electric vehicles more affordable for all customers.”

Both Tesla and GM have called on Congress to raise the ceiling on the number of cars eligible for tax credits. But some smaller carmakers are against the Heller proposal: if they have not ramped up their production by 2022, they will be unable to take any advantage of higher tax credit eligibility figures.

Other car companies, Reuters says, are in favor of tax credits being limited to more affordable cars, but Tesla and GM would certainly be against that, especially Tesla. Yet this is not the only EV tax credit proposal being discussed by Congress. In September, a group of Democrats in the Senate introduced a bill that would both lift the ceiling on the number of cars eligible for tax credit and extend the period of its duration to 10 years.

By Irina Slav for Oilprice.com

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