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Is the government considering extending the electric car tax credit?
I have heard that the Federal Tax Credit in the US only applies until a certain limit and then it slowly fades away. With the large push towards EVs, is the government considering extending the electric car tax credit to help with affordability?
Marlee John · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
This is a good question and one we get a lot considering the rising cost of living. Some companies are trying to encourage the government to lift the cap on the tax credit, but whether or not the government will listen is still uncertain.
The US Federal Tax Credit gives buyers up to $7,500 tax credit on the purchase of a new EV. However, this only applies if the company has not sold 200,000 eligible units. After that limit the available credit cuts in half and then half again until it’s unavailable.
Both Tesla and GM Motors vehicles have surpassed the limit for the tax credit, with Tesla reaching the cap back in 2019.
A recent article reported that companies like GM and Ford are trying to lift the credit cap. Companies suggest that the EV market is still too young for major incentives to be fading out and four main companies pledge $170 billion in infrastructure funding in exchange for an extension.
While there has yet to be a formal response by the government, there is still hope.
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