Senate Wants to Scrap EV Tax Credits for Those Earning More Than $100,000

Alex Healey
· 3 min read
For many drivers, one of the biggest incentives for buying an
electric vehicle
(EV) is being able to claim a
federal tax credit
at the end of the year.
However, the U.S. Senate just passed a non-binding amendment that seeks to stop the credit for Americans earning over $100,000, and restrict it to EVs that cost less than $40,000.
The timing of the resolution, not long after Biden’s
$2 trillion EV infrastructure proposal
, and plans to bring in stricter pollution and gas mileage requirements, has created some confusion.
Does our government want us to buy electric vehicles or not? Read on to find out what this amendment means for the future of electric cars, and why it was proposed in the first place.
Should those earning more than $100,000 have access to EV tax credits?

What does the amendment say?

As it stands, taxpayers qualify for a federal tax credit of up to $7,500 if they are one of the first 200,000 individuals to buy an electric vehicle from any given automaker.
Tesla and GM have already surpassed this sales milestone, but all other makes of electric cars are still eligible.
Last month, Nebraska’s Republican Senator Deb Fischer introduced a non-binding amendment to the budget, that would limit the tax credit to individuals who earn less than $100,000 per year, and to electric vehicles which cost less than $40,000.
As explained by
Ars Technica
, the amendment passed by 51 votes to 48. The vote was largely split along party lines, although three Democrats supported it, while Republican Senator Marsha Blackburn of Tennessee voted against the amendment.
Blackburn was no doubt influenced by the fact that Nissan and VW both manufacture EVs in her state, and a $2.3 billion battery cell factory is planned there too.
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Why, though?

Shortly after the resolution passed, Senator Fischer tweeted "everyday Americans are living paycheck to paycheck because of the sharp rise in costs due to #Bideninflation. We shouldn't be subsidizing luxury vehicles for the rich using money from hard-working taxpayers."
This suggests she was motivated by the desire to help ordinary Americans (™), by stopping frivolous spending of their tax dollars, or by coercing electric car makers to bring prices down below the $40,000 cap.
Critics however, have called it a PR stunt to keep the "Biden Inflation" talking point going, and further inflame her rural base against left-leaning coastal areas, several of which are planning on
banning gas powered cars

Where does the amendment go from here?

The good news for anyone planning on buying an EV is that Senator Fischer’s amendment is non-binding.
Currently, it is nothing more than a guideline for the legislation that will ultimately be written by the Senate Finance Committee.
This committee is chaired by a Democrat, who voted no, and even if he were to change his mind, the House would almost certainly block the motion.
Still, it gives a good indication of where Republican heads are at, and suggests the EV credit could be in jeopardy if they return to power.
For the time being however, the future is looking rosey for electric vehicles. Despite the semiconductor chip shortage, EVs are having a
record-breaking year
, making up 2% of all car sales in the U.S., their highest share yet.

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