It’s no secret that there is a limitation on the number of electric vehicles a company can sell, which are eligible for a tax credit of up to $7,500. Once a company sells 200,000 plug-in electric vehicles, tax credits are no longer available. While GM and Tesla are the only companies that have exceeded that limit so far, the CEOs of General Motors, Ford Motor Company, Stellantis, and Toyota Motor North America are now urging Congress to lift the federal government’s cap. They say a move will help encourage customer adoption of the cars and trucks.
General Motors, Ford, Stellantis, And Toyota: Lifting The Cap
According to CNBC, a joint letter was sent to congressional leaders on Monday. The hope is that the credit will be essential to keep the vehicles affordable as production and commodity costs rise. In addition, the letter states that “eliminating the cap will incentivize consumers” to adopt future electrified options. While GM and Tesla are the only companies that have exceeded the limit, the other automakers are expected to near the 200,000 mark as they release new electric products.
The letter proposes that there should be a sunset date for the tax instead of a cap once the EV market is more mature. The coming years are essential for the growth of the electric vehicle market as China and the EU continue to invest in electrification. The letter states that “our domestic policies must work to solidify our global leadership in the automotive industry.” In addition to the request, the letter also adds that the four companies have already pledged to invest over $170 billion through 2030 to bolster EV development, production, and sales. This includes near-term investments of more than $20 billion in the US.
For the past couple of years, GM CEO Mary Barra and other Detroit automaker executives have been urging that the cap get lifted to create a more level playing field. They say that the current policy penalizes early adopters of the technologies.