Electric car subsidies are now in the firing line.
The Trump administration is clearly not a fan of renewable energy or electric cars, and just to make things clear on the subject White House economic adviser Larry Kudlow said this Monday that they want to end subsidies for electric cars, renewable energy sources and what he termed "other items."
The recent announcement of GM’s plans to close a number of plants and lay off workers was clearly a point of contention and according to Reuters, Kudlow was aiming straight at the current $2,500 to $7,500 tax credit afforded to consumers who buy plug-in electric vehicles. He may have wanted to single out GM in this regard seeing as they have cost the US Government billions, but any policy changes will affect the entire auto industry.
“As a matter of our policy, we want to end all of those subsidies,” Kudlow said. “And by the way, other subsidies that were imposed during the Obama administration, we are ending, whether it’s for renewables and so forth.” The current subsidies get incrementally reduced once sales hit 200,000 vehicles per manufacturer. Tesla has already breached this number while GM should get there by the end of the year with its Chevy Bolt.
From that point, the tax credit will be halved every six months making the prospect of an EV revolution a pricey one. Wanting to end it outright will hurt other automakers that haven’t reached their 200,000 cap more than it would GM.
It may not be so easy to scrap the incentive as Kudlow makes it sound as they will need to get the support of Congress to get it done and there are many within the government that are actually keen to extend the EV tax credit.
With Democrats set to take control of the US House in January, the likelihood of a ban may be very low. Still, it is a tense time in the auto industry as many manufacturers are readying an array of electric vehicles to be released over the coming months.