First things first: call up the lobbyists.
Last week the Republican-controlled House unveiled a massive tax overhaul plan that, among other things, proposes to repeal the $7,500 tax credit for EV buyers. If passed, the change would go into effect after the 2017 tax year. Not surprisingly, automakers, from Tesla to Ford to GM aren’t happy about this. And now they’re striking back. Automotive News reports that automakers have called in their big gun lobbyists to begin defending the EV tax credit and to make it a permanent thing, at least for the foreseeable future.
GM in particular has a lot riding on this in light of its recent announcement to drop internal combustion entirely in the coming years. As for Tesla, well, enough said. But here’s the current problem automakers have: only 1 percent of overall sales in 2016 came from hybrids and EVs despite offering more than 30 models combined. Obviously more battery-powered vehicles are on the way, but this figure is proof that Americans still aren’t entirely onboard the EV bandwagon. Another area automaker lobbyists will need to work especially hard on is getting around the fact that gasoline prices are cheap these days. Why would the average car buyer want an EV when it’s easier to stick with what they know at a cheaper price?
But still, this EV tax credit is something that’s uniting automakers, both domestic and foreign. The Volkswagen Group, for example, is planning to launch some 30 EVs by 2025. Another issue worth pointing out is that nine US states, including California, have set their own sales targets for zero-emissions vehicles. Without that tax credit, things would definitely become more difficult. Lobbyists representing battery-related suppliers and even energy companies are also onboard to fight the House’s proposal. The Senate is still working on its own tax overall plan, so it remains to be seen whether the EV tax credit will form a part of that.
In any case, negotiations will soon get underway and no doubt automaker, supplier and energy firm lobbyists will be working some serious over time. If we had to predict, a deal of some sort will be worked out in the end, but not before some serious debates.