Merkley, Welch Introduce Bicameral Legislation to Extend Electric Vehicle Tax Credit

WASHINGTON, D.C. – Oregon’s Senator Jeff Merkley (D-OR) and Congressman Peter Welch (D-VT) today introduced the Electric Cars Act of 2019, bicameral legislation to fully extend the electric vehicle tax credit for 10 years, and help deploy critical alternative fuel charging infrastructure.

The Electric Cars Act is cosponsored in the Senate by Senators Martin Heinrich (D-NM), Sheldon Whitehouse (D-RI), Tina Smith (D-MN), Kamala Harris (D-CA), Cory Booker (D-NJ), Dianne Feinstein (D-CA), Bernard Sanders (I-VT), and Catherine Cortez-Masto (D-NV) and in the House by Reps. Jared Huffman (D-CA), Raúl  Grijalva (D-AZ), Ro Khanna (D-CA), Paul Tonko (D-NY), Matt Cartwright (D-PA), Anna Eshoo (D-CA), Gerry Connolly (D-VA), Jim McGovern (D-MA) and Harley Rouda (D-CA).

Currently, a federal tax credit of up to $7,500 is available for the purchase of electric vehicles. However, federal statute caps the number of vehicles eligible for the tax credit at 200,000 for each manufacturer. Several domestic manufactures have already hit the manufacturing cap and consumers who seeking to buy those vehicles will no longer receive full tax credits.

“As they rest of the world plunges ahead on electric vehicles, transitioning their manufacturing and developing new vehicle technologies, the U.S. is falling behind, rolling back efficiency standards, and letting critical incentives lapse,” said Merkley. “Every day, we see the effects of climate chaos all around us—record-setting droughts, out-of-control wildfires, and deadly hurricanes and floods. Market-based incentives that help EVs compete with gas-powered cars and build clean energy infrastructure are not only good for our economy, they’re essential to our future.”

“Transportation is the single largest contributor to greenhouse emissions in the United States,” said Welch. “It is urgent that we transition to cleaner, more efficient modes of transportation. Our legislation will make electric vehicles and their charging stations more affordable, while saving Vermonters money at the gas pump and reducing their environmental footprint.”

“The writing is on the wall:  to avoid the worst of climate change, we need to transition away from fossil fuels across our economy,” said Whitehouse.  “This important incentive has cut transportation emissions and helped our auto industry to develop some of the most exciting electric vehicles on the market.  Extending it will help drive that progress for another decade.”

“We know that when we incentivize the use and development of electric vehicles, we not only take steps to combat climate change but also grow our economy,” said Cortez Masto. “As demand for electric vehicles increases, manufacturers have created good-paying jobs for Nevadans and made strong investments in Nevada’s economy. I’m proud to join Senator Merkley in this effort to encourage clean transportation, and I’ll continue fighting to ensure Nevada remains the Innovation State.”

The transportation sector is now the largest source of greenhouse gas emissions in the United States, and a significant source of carbon pollution worldwide. Countries across the globe have recognized this challenge and are aggressively investing in electric vehicle technologies in order to bolster fuel security, reduce pollution, and improve health outcomes. Nearly a dozen countries and dozens of cities have committed to phasing out internal combustion engines. The U.S., however, is at risk of falling behind on technology development and deployment of electric vehicles.

The Electric Vehicle (EV) tax credit has been instrumental in helping American electric vehicle manufacturers advance the EV market, and ensures that consumers have a greater range of options when selecting their next vehicle. Given global efforts to transition away from internal combustion engines, the U.S. should not be limiting the production and support of domestically manufactured electric vehicles. A recent survey found that 74 percent of consumers say the tax credit would affect their decision to buy an EV, and 63 percent said the credit is an important measure to support EV adoption.

The Electric Cars Act would improve this vital tax credit by:

  • Eliminating the per manufacturer cap, allowing consumers access to the tax credit for the next 10 years, regardless of the manufacturer from which they purchase their car;
  • Allowing buyers to use the tax credit over a 5-year period, or apply the credit at the point of sale, making the credit more applicable to those without large tax liability; and
  • Providing a 10-year extension of tax credits for alternative fuel vehicles and charging infrastructure to incentivize the buildout of this important infrastructure around the country.