New bill proposes changes to country’s EV incentive structure

New bill proposes changes to country’s EV incentive structure

A new bill has recently been introduced in the Congress for official removal of the ‘200,000 delivery threshold’ for electric vehicle (EV) car manufacturers. The threshold puts an EV maker at a disadvantage because its buyers cannot eventually avail EV incentive in the US market.

The EV incentive structure in the US takes the form of a $7,500 tax credit, and is therefore not a direct discount on EV purchase. The incentive is capped at a limit of ‘200,000 vehicles per manufacturer’, and once an automaker hits the threshold, the federal tax credit for its buyers is phased out over a period of one year.

An effort to change the EV incentive structure and remove the ‘200,000 delivery threshold’ was launched earlier this year. As a result of the effort, a new bill -- H.R.6274 -- was unveiled in Congress by Rep. Peter Welch (D-VT) last Friday.

The new bill not only proposes the removal of the delivery threshold for EV makers, but also recommends the replacement of the threshold with a ten-year limit for EV incentives. It also proposes that the tax credit system should be changed to a direct rebate on EV purchase.

The introduction of the new bill comes at a time when Tesla Motors is moving closer to hitting the 200,000th delivery threshold in the US this quarter. Tesla will be the first automaker to hit the threshold, with General Motors (GM) likely to follow it.