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EV Federal Tax Credit May Be Renewed for Tesla, GM Thanks to the 2021 GREEN Act

The year was 2011 when Barack Obama rocked the automotive industry with federal grants for electric vehicles. More to the point, I’m referring to the federal tax credit that cuts $7,500 off the suggested retail price of a PHEV or an EV. According to current legislation, the said credit is phased out once 200,000 plug-in vehicles are sold by a manufacturer.
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Tesla and General Motors are the only automakers that have accomplished this feat so far, and Nissan is breathing down their neck with the Leaf. After the Donald Trump administration, which didn’t care too much about electric vehicles, Joe Biden and the Democratic-controlled Senate may introduce a brand-new federal tax credit thanks to the 2021 iteration of the GREEN Act.

The what, you’re asking yourself? It’s a piece of proposed legislation from Mike Thompson, who represents the 5th Congressional District of California. Section 401 of the GREEN Act mentions a cap of 600,000 vehicles including the 200,000 vehicles that have already benefitted from the original federal tax credit. In other words, Tesla and General Motors may be treated to 400,000 credits each if the bill passes through Congress.

According to the 2021 GREEN Act, the electric vehicles sold between the 200,000 threshold and those sold on the date of enactment are excluded in determining the 600,000 threshold. But on this occasion, the credit will cut $7,000 off the vehicle’s price instead of $7,500.

With the Dems in control of the Senate, House, and the White House, it appears that Elon Musk and Mary Barra have a good reason to celebrate. But until then, let look into the starting prices of the Model 3 and Bolt EV.

Although it's on the small side of electric vehicles, the Bolt is pretty good value at $36,500 excluding destination charge and options. The four-door sedan from Palo Alto can be yours from $37,990 for the rear-wheel-drive Standard Range Plus that offers four more miles of range than the Chevy.

The $7,000 federal tax credit would bring those starting prices down to $29,500 and $31,990. The 2021 GREEN Act, therefore, would open both electric vehicles to a larger and more varied pool of potential customers.

 Download attachment: 2021 GREEN Act proposed by Mike Thompson (PDF)

 
 
 
 
 

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