Bill to expand EV credits part of broad lobbying push

Source: Geof Koss, E&E News reporter • Posted: Friday, April 12, 2019

The manufacturers’ cap on a key federal electric vehicles tax credit would increase threefold under bipartisan legislation offered yesterday by a quartet of senators.

It comes as lawmakers on both sides of the aisle push for action on a number of tax issues, including expired energy incentives.

The measure, introduced by Sens. Debbie Stabenow (D-Mich.), Gary Peters (D-Mich.), Lamar Alexander (R-Tenn.) and Susan Collins (R-Maine), would allow an additional 400,000 vehicles per manufacturer to qualify for the EV credit.

The current break of $7,500 per vehicle is capped at 200,000 per manufacturer, after which the value decreases for EV purchasers from that maker. General Motors Co. and Tesla Inc. are the only two firms to have hit the cap.

The bill would allow the additional 400,000 vehicles per carmaker to qualify for a $7,000 credit through the calendar quarter after the 600,000th vehicle is sold.

The incentive’s value would then drop by 50% before being phased out after six months, according to a summary provided by the sponsors.

“At a time when climate change is having a real effect on Michigan, today’s legislation is something we can do now to reduce emissions and combat carbon pollution,” said Stabenow.

Alexander, whose home state includes several auto manufacturing facilities, noted the rapid growth in EVs in recent years.

“Ten years ago there were no mass-produced electric cars on U.S. highways, and today, there are about 1 million, and automakers are planning to make millions more,” he said.

“Investing in American research and technology for better electric vehicles is one way to help our country and the world deal with climate change,” he said.

The bill marks the latest offering in the simmering battle over the EV tax break, which the Trump administration wants to cancel.

Critics, including Sen. John Barrasso (R-Wyo.), say it favors the wealthy and note EVs do not contribute to the upkeep of U.S. roads because owners do not pay gasoline taxes (E&E News PM, Feb. 6).

In recent months, there’s been a variety of proposals to extend and overhaul the break, including one by Sen. Jeff Merkley (D-Ore.) released earlier this month (E&E Daily, April 3).

Extenders remain in limbo

The flurry of EV credit bills comes amid growing pressure on House and Senate tax writers to take up a package to revive an assortment of expired energy incentives.

While a bipartisan Senate bill would simply extend those breaks for two years, there’s continuing pressure on lawmakers to make tweaks to existing credits (E&E News PM, Feb. 28).

For instance, the Energy Storage Association and other industry and advocacy groups urged House leaders this week to allow energy storage to qualify for the investment tax credit that supports other renewable technologies.

Sen. Joe Manchin (D-W.Va.) yesterday pitched two tax extenders helping retired and sick coal miners, mirroring two goals of his bill, S. 27.

In a letter to Senate Finance Chairman Chuck Grassley (R-Iowa), Manchin and fellow Democrats called for a funding mechanism to save the imperiled United Mine Workers of America pension plan and a measure to restore the black lung excise tax to levels that expired last year.

A pension fix has some bipartisan support, but Senate Majority Leader Mitch McConnell (R-Ky.) remains leery, and coal companies staunchly oppose a return to higher black lung fees.

‘Other considerations’

Grassley, who is waiting for the House to go first on the tax extensions, said last week that he was unsure why the Ways and Means Committee hasn’t acted.

“What I’ve heard at the staff level is that they want to move it but there are ‘other considerations’ unrelated to the substance of the extenders,” he told E&E News. “And I don’t know what those ‘other considerations’ are.”

One factor is reportedly House Democrats’ insistence that the package be offset to comply with pay-as-you-go budgeting rules — a move that Grassley opposes.

“I’ve made it very clear that when you extend extenders and it’s existing law, you don’t have to offset because it’s already into the system,” he said. “Just like appropriations sunset, we don’t have to have offsets for them. So PAYGO is a bad thing if the House is trying to shove that down our throats.”

Rep. Earl Blumenauer (D-Ore.), a senior Ways and Means member and co-sponsor of the House version of the new EV tax credit bill, declined to offer a timeline of when the panel may mark up extenders.

“People are having healthy discussions, people are looking at it, making proposals,” he told E&E News yesterday. “Things are happening. Part of it is there’s a lot going on, trade, pensions, retirement, prescription drugs, and there’s other little ancillary issues that take time.”

Reporter Dylan Brown contributed.