Trump proposed cuts the EV Tax Credit in 2020 Budget

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Reuters reported that the White House has announced its budget proposal for 2020 and tax credits for EVs (electric vehicles) are on the chopping block. The Trump administration is proposing to eliminate the subsidy. It provides more than $7,500 subsidy on the purchase of a new EV. The White House claimed that the new move will save the government at least $2.5 billion over the next decade. It is unlikely the proposed budget will pass through Congress before you rush out to buy a plug-in car to score the incentive prior to it disappears.

The House of Representatives currently ruled by a Democratic majority said any Trump proposal will face stiff opposition. Auto-manufacturers have been lobbying the U.S Congress to extend the credit. It currently ends after a company hits 200,000 vehicles sold. Democrats are expected to make an effort to keep the credit alive. Moreover, they will face challenges in doing so. The U.S Senator John Barrasso (the chair of the Senate Environment and Public Works Committee) has proposed legislation to end the tax credit.

The tax credit is to cost the government money, that’s in part due to it has been successful in incentivizing the purchase of electric vehicles. A congressional report claims that at least 57,000 taxpayers claimed an EV credit in 2016. It is expected that $7.5 billion in subsidies will be given out to EV buyers between 2018 and 2022. 2 vehicle manufacturers, Tesla, and General Motors have already hit the 200,000 vehicle cap, but they are still eligible for smaller credits.