New tax reform bill does not kill tax credit for electric vehicles

Although the new tax reform bill, as introduced in the U.S. House of Representatives, had contained provisions to eliminate the $7,500 tax credit for EVs, the version that was introduced on Thursday in the U.S. Senate does not contain these provisions; as a result carmakers are likely to face decreased legal headwinds.

The U.S. Senate tax reform proposal that was unveiled on Thursday does not kill the $7,500 electric vehicle tax credit the Republicans had proposed in the U.S. House of Representatives.

If the credit would have been eliminated, it would have significantly hurt automakers, including Tesla Inc, General Motors Co, Nissan Motor Co and Volkswagen AG.

Current provisions in law allow automakers to use the credit however this is phased out once it reaches sales of plug-in vehicles above 200,000.

Although electric vehicles use expensive batteries, which are pricier than gasoline-powered vehicles, they are considered more economic in the in a broader context since they are far less polluting and do not directly contribute to global warming and climate change.

With the widespread use of EVs, and with breakthroughs in battery technology, the cost of their batteries are expected to drop significantly.

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Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Regulations & Legal, Strategy, Sustainability

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