The tax credit program states that the phase-out period starts during the second calendar quarter after the calendar quarter in which the cap was reached – meaning that customers will still receive the full $7,500 tax credit for at least a full quarter. In other words, people will still get the full credit for 3 to 6 months after an automaker hit the mark – depending on if it was hit early or late in a quarter.
After that, the tax credit is reduced by 50% for 6 months and then another 50% for another 6 months before being completely phased out.
The Phase Out Period:
Pending Legislation to rescind the Cap:
U.S. Senator Jeff Merkley (R) of Oregon is leading an effort to remove the cap, or extend it for 10 years. At first glance, this effort seems doomed considering the House, Senate, and the Executive Branch have insisted all things clean energy are for sissies. However, the 2019 Congress will probably look different...much different.
But more importantly, there is the political optics of unintended consequences.
As it stands, 2 American companies - GM & Tesla - spent many $ Billions in capital to seed the adoption of EV's. Arguably, if the EV tax credit is phased out for them, they will be at a disadvantage in the market from...
Foreign manufactures. Therefore, the U.S. federal government will end up having an EV incentive program that directly Funds VW, Porsche, Nissan, Honda, AvtoVaz/Lada, BMW, Mercedes, Renault, Hyundai, KIA, Rolls Royce, Ferrari, Subaru, Toyota, FIAT, Volvo, Jaguar, and about 9 Chinese manufactures that could import EV's (Remember, Ford has effectively stepped out) with taxpayer underwritten credits.
This predicament would serve to solely disadvantage the only two remaining American electric automakers. The same two that made investment sacrifices to Pioneer the market, develop the market, and earn consumer consideration of EV's. Furthermore, it would likely present a huge risk to American manufacturing jobs, punishing American workers for helping to blaze the trail. The trail that overseas companies can easily take advantage of, and be subsidized by the U.S. Government, without having assumed any of the risk that American companies Tesla and GM took.
Moreover, American Utilities now 'see the light' (ahem) of increases for their product. They are on board as well and are signatory to this legislation. GM, Tesla, and the Utilities as a united front 'maintain a battery' (ahem again) of influential Lobbyist that have the 'power to energize' (ahem cubed) this action.
Read the letter
Article in an Energy trade publication