Proposed Bill Will See $12,500 Credit On New EVs And $4,000 Credit On Used EVs

• EV tax credits boosted to $12,500 per vehicle
  
  
• $4,000 tax credit for buying a used EV
• $60 billion set aside to cut emissions on the manufacturing side

A new bill drawn up by Senate Democrats proposes several new tax breaks and grants for car buyers and automotive manufacturers.

If this bill passes, the car-buying public can look forward to a $4,000 tax credit for used electric vehicles and up to $12,500 on a new vehicle. To date, tax credits were only applicable to new cars, and the cap was set at $7,500.

Once a manufacturer has sold 200,000 vehicles, the tax credit no longer applies, but President Joe Biden proposed expanding the cap in February last year. GM, Tesla, and Toyota have all hit the sales cap and will be ecstatic about the new proposed cap.

President Biden’s proposal will see the EV tax credits boosted to $12,500 per vehicle. He also wants to lift the 200,000-cars-per-manufacturer cap. According to Reuters, the automotive manufacturers have lobbied for an extension of this credit because they can’t meet the government’s emissions goals without offering their customers cars at a reasonable price.

The Biden administration has set a goal of 50% of all vehicles sold by 2030 to be EV or plug-in hybrid. There is currently no indication of what the new cap will be, but there is a new set of standards that will judge who gets a break from the taxman.

The proposed new credit will be limited to trucks, vans, and SUVs that cost no more than $80,000. For sedans, hatches, and wagons, the limit is set at $55,000. These breaks are also limited to families with a gross income of $300,000 per year.

This new set of rules eliminates several top-selling EVs like the Tesla Model 3 Long Range and Performance ($59,490 and $62,990, respectively), the Model X ($126,490 +), and the Model S, which starts at $109,490. The Bolt and upcoming Equinox EV and Blazer EV would be eligible on the GM side. Some Silverado 1500 EV models will qualify, but the Hummer EV duo can forget about it.

Toyota is the big winner, with most plug-in hybrids and upcoming EVs falling under the threshold.

The bill also mentions $2 billion in grants for retooling existing manufacturing facilities, but only for producing “clean” vehicles. New manufacturing facilities will have access to $30 billion in loans, while an additional $30 billion has been set aside in production tax credits to accelerate US-based manufacturing of solar panels, batteries, mineral processing, and wind turbines. This part of the bill will benefit manufacturers who are currently in the process of making their facilities more sustainable.

The US Postal Service will receive an additional $3 billion to buy EVs and build charging stations, and $1 billion has been allocated to buy environmentally friendly school buses and garbage trucks. The bill will also include tax credits and grants for the domestic production of biofuels and the infrastructure that will go with it, but no figures for this portion of the bill are available.