US Senators Debbie Stabenow (D-MI), Lamar Alexander (R-TN), Gary Peters (D-MI), and Susan Collins (R-ME) along with Congressman Dan Kildee (MI-05) introduced the Driving America Forward Act, bipartisan legislation to expand the electric vehicle and hydrogen fuel cell tax credits.
Under current law, consumers may receive a tax credit of up to $7,500 if they purchase an eligible electric vehicle. However, the tax credits begin to phase out permanently once automakers sell more than 200,000 units. The Driving America Forward Act raises the cap and allows purchasers of an additional 400,000 vehicles per manufacturer to be eligible for the tax credit.
Sales of electric vehicles in the US increased by more than 80% in 2018 and two manufacturers have already hit the lifetime cap of 200,000 units (GM and Tesla). Under current law, after an automaker sells 200,000 qualifying vehicles, consumers are eligible to receive the full value of the $7,500 tax credit through the calendar quarter after the cap is hit. The value of the credit to consumers from this automaker then decreases to 50% and 25% over the next 12 months before being phased out entirely.
The Driving America Forward Act raises the cap by allowing purchasers of an additional 400,000 vehicles per manufacturer to be eligible for a $7,000 tax credit. Consumers can receive the full value of a $7,000 credit through the calendar quarter after the 600,000th vehicle is sold. The value of the credit to consumers from this automaker then decreases to 50% before being phased out entirely after six months. The bill maintains the $7,500 tax credit for the first 200,000 units sold.
The Drive America Forward Act also extends the hydrogen fuel cell credit for ten years, through 2028. The legislation is also co-sponsored by US Representatives Don Beyer (VA-08), Earl Blumenauer (OR-03), Brian Higgins (NY-26), Jimmy Gomez (CA-34), Stephanie Murphy (FL-07), Jimmy Panetta (CA-20), Terri Sewell (AL-07), and Tom Suozzi (NY-03).
The Driving America Forward Act is supported by 60 organizations, including ABB Inc., Advanced Energy Economy, Alliance of Automobile Manufacturers, Alliance to Save Energy, American Lung Association, Association of Global Automakers, BMW of North America, CalStart, Center for Climate and Energy Solutions, CERES, Charge Forward LLC, ChargePoint, ChargeUp Midwest, Clean Fuels Michigan, Consumers Energy, Copper Development Association, DTE, Eaton, Ecology Center, Edison Electric Institute, Electrify America, Electric Auto Association, Electric Drive Transportation Association, Electric Vehicle Charging Association, eMotorWerks, an Enel Group Company, Environmental Defense Fund, Environmental Law and Policy Center, EV Drive Coalition, EVgo, FCA US, Ford Motor Company, FORTH, Fuel Cell and Hydrogen Energy Association, General Motors Company, Greenlots, Honda North America Inc., ITC Holdings Corp., League of Conservation Voters, Lyft, Michigan League of Conservation Voters, Motor and Equipment Manufacturers Association, NAFA Fleet Management Association, National Rural Electric Cooperative Association, Natural Resources Defense Council, Nissan North America, Panasonic Corporation of North America, Plug In America, Rivian Automotive, LLC, Securing America’s Future Energy, SemaConnect, Siemens Corporation USA, Sierra Club, Silicon Valley Leadership Group, TE Connectivity, Tesla Inc., The Nature Conservancy, Toyota Motor North America, Union of Concerned Scientists, Volkswagen Group of America, and Volta.