Tesla buyers in US can access a $7,000 tax credit for the purchase of another 400,000 EVs thanks to the Growing Renewable Energy and Efficiency Now (GREEN) Act 2021. The new bill could provide consumer access to tax credits for manufacturers who have already sold over 200,000 EVs in the US, and rightly reward them for their early adoption of electric vehicles.
The US federal government has a tax program that provides incentivizes the purchase of EVs. Each buyer can get a tax credit of $7,500. However, there are some restrictions: if a manufacturer has sold 200,000 electric vehicles in the United States, a phase-out period begins, which gradually denies access to buyers of this car manufacturer's EVs to this federal tax credit. Tesla hit a sales threshold of 200,000 EVs in the US in 2018, so buyers of the company's cars have been recognizing these restrictions for some time now.
But now, House Ways and Means Committee Democrats introduced the Growing Renewable Energy and Efficiency Now (GREEN) Act of 2021 on February 5, 2021. The bill is an updated version of a similar bill of the same name introduced in June of 2020. Many provisions of the GREEN Act either extend or expand the application of existing renewable energy tax credits and EV policy.
The bill expands the existing tax incentives available for the sale of electric vehicles. According to it, the government increases the credit limit for electric vehicles for manufacturers to 600,000 vehicles, but reduces the benefit by $500 after the sale of the first 200,000 vehicles. This would replace the current phaseout period that begins with 200,000 vehicles sold, with a phaseout period that instead begins during the second calendar quarter after the 600,000-vehicle threshold is reached. At the start of the new phaseout period created under the bill, the credit is reduced by 50 percent for one calendar quarter and subsequently ends.
For manufacturers that already exceeded the 200,000 thresholds before the bill was passed, such as Tesla and GM, the number of vehicles sold in between 200,000 and those sold on the date of enactment are excluded in determining when the 600,000 thresholds are reached.
In addition to building on existing credits, the bill creates a new credit for manufacturers for the sale of zero-emission heavy vehicles and buses, which would equal 10 percent of the sales price of such vehicles to the extent the sales price does not exceed $1 million. To qualify for this new credit, the vehicle: (i) must be for domestic use, (ii) must not weigh less than 7 tons, (iii) must not include an internal combustion engine, and (iv) must be propelled solely by an electric motor which draws electricity from a battery or fuel cell.
This will expand the possibilities for Tesla Semi buyers with a range of 300+ miles for use in the US. Tesla Semi 500+ miles weighs more than 7 tons, so buyers will not be able to qualify for incentives to purchase it.
© 2021, Eva Fox. All rights reserved.
We appreciate your readership! Please share your thoughts in the comment section below.