Is it Groundhog Day already?
We’ve been here before and some people refuse to give up. Reuters reports that the White House stated earlier this week it wants to eliminate the $7,500 tax credit towards the purchase of new electric vehicles because it would save the US government $2.5 billion over a decade.
Automakers have been lobbying for the exact opposite to happen. They want the tax credit to be extended in order to help reduce the cost of upcoming new EVs for buyers. This credit is designed, however, to expire once an automaker sells 200,000 EVs. Tesla and GM, for example, hit that figure last year. But Volkswagen will soon launch its first I.D. branded EV.
Last November, it was reported that over 57,000 taxpayers claimed a total of $375 million in EV tax credits in 2016, so it’s not difficult to see why some in government want to see the subsidy end. The Trump White House also wants to end subsidies for renewable energy sources. This is not the first time Trump has made clear his disdain for tax credits like these. Last November, for example, he threatened to eliminate subsidies for GM after it announced the closures of five North American manufacturing plants and the loss of 15,000 jobs.
The just-announced Trump 2020 budget also seeks to end funding for an Energy Department loan program that helped automakers build more fuel-efficient vehicles. Tesla, Ford, and Nissan have all taken advantage of this but the program has not given a new loan since 2011.
By slashing funding for that program and the expected money to be saved from the tax credits, the Trump Administration seeks to increase military spending and fund a border wall. To be fair, the proposed budget, which will surely be rejected outright by Congress, also includes other cost-cutting measures, such as a reduction in foreign aid and a smaller State Department budget.