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U.S. Senators Debbie Stabenow (D-MI), Gary Peters (D-MI) along with Congressman Dan Kildee (MI-05) introduced the Driving America Forward Act, bipartisan legislation to expand the electric vehicle and hydrogen fuel cell tax credits.
Under current law, consumers may receive a tax credit of up to $7,500 if they purchase an eligible electric vehicle. However, the tax credits begin to phase out permanently once automakers sell over 200,000 units. The Driving America Forward Act raises the cap and allows purchasers of an additional 400,000 vehicles per manufacturer to be eligible for the tax credit.
“At a time when climate change is having a real effect on Michigan, the legislation is something we can do now to reduce emissions and combat carbon pollution,” said Senator Stabenow. “Our bill will help create American jobs and cement Michigan’s status as an advanced manufacturing hub.”
“Expanding tax credits for electric vehicles would benefit consumers and our environment,” said Senator Peters. “Continued investment in advanced technologies of the future will help Michigan stay at the forefront of global auto innovation, spur job growth and move us toward a more sustainable and competitive transportation future.”
“This bipartisan legislation helps to address the urgent threat of climate change with bold solutions that help to create jobs in Michigan,” said Congressman Dan Kildee. “Putting more electric vehicles on the road will reduce carbon emissions and support investment in American-made manufacturing. This legislation is a win-win when it comes to protecting our planet and growing our economy.”
Sales of electric vehicles increased by more than 80 percent in 2018 and two manufacturers have already hit the lifetime cap of 200,000 units. Under current law, after an automaker sells 200,000 qualifying vehicles, consumers are eligible to receive the full value of the $7,500 tax credit through the calendar quarter after the cap is hit.
The value of the credit to consumers from this automaker then decreases to 50% and 25% over the next 12 months before being phased out entirely.
The Driving America Forward Act raises the cap by allowing purchasers of an additional 400,000 vehicles per manufacturer to be eligible for a $7000 tax credit. Consumers can receive the full value of a $7,000 credit through the calendar quarter after the 600,000th vehicle is sold.
The value of the credit to consumers from this automaker then decreases to 50% before being phased out entirely after six months. The bill maintains the $7,500 tax credit for the first 200,000 units sold.
The Drive America Forward Act also extends the hydrogen fuel cell credit for ten years, through 2028.