EV Tax Credit Expansion Still On Hold

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Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

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, Automotive Editor - November 17, 2021

President Joe Biden’s $1 trillion infrastructure bill was recently signed into law, bringing money to create jobs by fixing roads, expanding broadband internet access, and building electric vehicle chargers across the country. While this is a huge win for the Biden administration, it won’t help consumers looking to purchase a new EV, as the Build Back Better bill that includes an increase to the current tax credit for electric vehicles has been put on hold in the House.

For consumers with an electric car and those looking to replace their current gas-powered vehicle with an EV, the passing of the infrastructure bill is good news. Building more EV charging stations is a major part of the bill, though the chances of the government being able to build 500,000 charging stations with its final budget are unlikely.

Originally, the Biden administration claimed that the bill would include $15 billion to build a national network of charging stations to boost the adoption of electric cars. The bill that was passed only provides $7.5 billion in federal grants to build the network. So, 500,000 charging stations seem unlikely.

Additionally, the drastic reduction in the amount allocated to the network for EV chargers also affects the type of chargers that will be built. While we first thought that fast chargers would make up the majority of the charging network, they’re pricey to build and would easily take up a large portion of the funds. Current fast chargers cost between $40,000 and $100,000. Level 2 chargers are far more affordable and are more likely to be used for the network.

Another blow to the infrastructure bill is that the Build Back Better bill was put on hold as legislators attempt to lower costs. The bill has proposed to increase the federal tax credit for electric vehicles to $12,500 from $7,500. A large part of the $12,500 figure comes from $4,500 for EVs made at unionized factories. This has drawn protests from automakers and legislators alike. With the bill in its current state, it is likely to face a lot of opposition in the Senate.

The proposed $12,500 federal EV tax credit has quite a few requirements. Just like the current federal tax credit, $4,000 of it comes from being an EV, while $3,500 is offered for vehicles with a battery pack with at least 40-kWh of capacity. An additional $4,500 comes from EVs built by a unionized workforce and another $500 for EVs that have American-made batteries. At the moment, only the Chevrolet Bolt EV and Bolt EUV would meet the requirements for the full $12,500 tax credit. Notably, Tesla, Ford, Hyundai, Kia, Audi, Mercedes-Benz, and BMW would all miss out on the full amount.

The House is expected to vote on the Build Back Better bill this Friday. Even if the House votes in favor of the bill, it will move on to the Senate where it could be modified. In its current form, the Build Back Better bill would make electric vehicles far more affordable for consumers, as long as they’re willing to purchase a car that meets all of the requirements. Unfortunately, not a lot of vehicles do, but that would change if the bill is signed into law.

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Pictured: 2022 Chevrolet Bolt EV

, Automotive Editor

Based out of the Washington, D.C. area, Joel Patel is an automotive journalist that hails from Northern Virginia. His work has been featured on various automotive outlets, including Autoweek, Digital Trends, and Autoblog. When not writing about cars, Joel enjoys trying new foods, wrenching on his car, and watching horror movies. 

Follow On: Twitter

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