Electric Vehicle Tax Credit Survives GOP Tax Reform But Limits Vehicle Sales

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Tesla Motors/Handout via REUTERSFirst production model of Tesla Model 3 out the assembly line in Fremont, California , U.S. is seen in this undated handout photo from Tesla Motors obtained by Reuters July 10, 2017.

Buying electric vehicles in the United States comes with many incentives that go far beyond environmentalism. Among these incentives are the so-called electric vehicle tax credits which, despite the lack of support for renewable energy from the Republican Party, surprisingly survived the recent tax reforms they had spearheaded.

In the tax bill signed by President Trump last December, solar and wind power subsidies were drastically slashed. Against all odds however, the full range of tax incentives for renewable energy, as well as the $7,500 electric vehicle tax credit.

Electric vehicle manufacturers like Tesla and General Motors should be cheering at the news right? Well not exactly as the tax incentives weren’t left unscathed by the Republican tax reform bill.

While the new tax bill retains the electric vehicle tax credit, the incentives begin to phase out after a company sells 200,000 electric vehicles. This is a major issue for large manufacturers as it removes any monetary incentive to buying an electric vehicle as opposed to a conventionally powered one.

The 200,000 vehicle limit was first introduced during the George W. Bush administration, as a way to move the nation toward energy independence. Tesla and GM benefitted from the tax credit thanks to their pioneer status in the electric vehicle industry but thanks to the new tax bill, they are now destined to lose it.

GM…

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