Republican Bill Proposes to Lift Cap on Electric Car Tax Credits

A third piece of legislation has been introduced in the United States Congress to make changes to the current federal tax credits for electric cars.

Reuters reported Tuesday that Republican Senator Dean Heller of Nevada has proposed lifting the tax credit cap of 200,000 vehicles to give automakers unlimited credits.

There’s a catch, however. Should the legislation ever pass, the credits would expire at the end of 2022 for every automaker. Currently, there is no timeframe for the tax credits to expire; only when an automaker sells their 200,000th qualifying vehicle do the credits enter a phase-out period. The proposal has already gained criticism since some automakers haven’t begun selling electric cars yet, while others such as Tesla and General Motors, would benefit more generously.

Tesla became the first automaker to lose the full federal tax credit of $7,500 this year. Any cars delivered after December 31, 2018, will be eligible for $3,750 through the first six months of 2019. The credit will halve itself again for the final six months of 2019 until the credit reaches $0 in January 2020.

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Senator Heller’s bill comes after another Republican Senator, John A. Barrasso of Wyoming, introduced his own legislation to gut the federal tax credits altogether. His proposal also aims to tax electric car drivers since the cars do not pay into the gas tax, which helps pay for infrastructure improvements.

In the U.S. House of Representatives, Democratic Representative Peter Welch of Vermont also introduced a bill this past July to lift the 200,000-vehicle cap on electric car tax credits. However, his proposal extends the credits for another 10 years. Further, the legislation aims to turn the tax credit into a point-of-sale subsidy, which could attract more buyers. Currently, EV buyers receive the tax credit when he or she files their taxes the following year.

[Source: Reuters]

A version of this story originally appeared on Hybrid Cars.