According to foreign media reports, Republicans in the U.S. Senate recently proposed an amendment to the tax budget bill, planning to terminate the current one earlyElectric vehiclePreferential tax policies. According to this latest proposal, the tax credit of up to $7,500 per vehicle for the sale and lease of new electric vehicles will be officially abolished on September 30 this year, and the credit of up to $4,000 per used electric vehicle will also end at the same time.
According to the proposal, the new car tax credit will end 180 days after the proposal takes effect, while the used car concession has an additional 90-day transition buffer period. Notably, once the proposal goes into effect, it will immediately disqualify tax credits for rental vehicles that are not assembled in North America and do not meet other requirements.
Meanwhile, another version of the proposal in the U.S. House of Representatives suggests a different transition plan. The House version advocates extending the $7,500 new electric vehicle tax credit until the end of 2025, and for car companies that have not yet sold 200,000 electric vehicles, the policy can be further extended until the end of 2026.
Image credit: Tesla
This policy shift marks a significant shift in Republicans’ attitudes towards electric vehicles, in stark contrast to former President Joe Biden’s administration’s policy approach to promoting electric vehicles and renewable energy to combat climate change.
Recently, Republicans have launched a policy offensive against electric vehicles at multiple levels. In addition to the EV tax credit policy, the proposal submitted by the Senate contains other important provisions. The most controversial of these is the proposed abolition of penalties for non-compliance with average fuel economy (CAFE) standards, which is considered to be loosening the restrictions on traditional fuel vehicle manufacturers and reducing the compliance pressure on their transition to electrification.
In addition, the proposal submitted by the Senate also stipulates that until 2028, loan interest on new cars produced in the United States will be tax-free, but a step-by-step reduction mechanism will be set up for individual taxpayers with annual incomes of more than $100,000.
In addition, after a ruling by Senate regulatory experts, Republicans finally withdrew the provisions of the proposal requiring the United States Postal Service (USPS) to scrap thousands of electric vehicles and charging equipment. Currently, USPS has 7,200 electric vans, including Ford’s electric Transit and Oshkosh Defense’s new generation of delivery vehicles. The agency has warned that forcing these electric vehicles to be scrapped will cause economic losses of $1.5 billion.
