The U.S. Senate is going to move forward with a sweeping new bill after Senator Joe Manchin finally accepted to include investments to curb climate change.
The bill is going to give access to the electric vehicle tax credit for Tesla and other companies, have changes in the contribution rate, and have an investment that would be used on projects aimed at reducing global greenhouse gas emissions with a deadline of 2030.
The bill passed last year by the US House of Representatives has been stuck in the Senate ever since its passage.
The EV industry is interested in the tax bill because it includes a long-needed reform to the federal tax credit for electric vehicles.
It is a point of contention although it accounts for only a small part of the overall bill.
The main goal of the reform, and the one most people agree on, is the need to eliminate the tax credit cap after automakers hit 200,000 EVs sold, since it puts American automakers who were early in promoting electric vehicles at a disadvantage.
It also happens that those multinational auto manufacturers are still favored by having access to the EV credit
Sen. Joe Manchin, a Democrat from West Virginia, is the deciding vote and has not yet announced his decision on whether or not he will be voting for the Democratic healthcare reform bill.
Senator from a traditionally conservative state reveals support for trending bill it as “Inflation Reduction Act of 2022,” showing that conservatives can care about the environment when the topic affects them
The final amendment to the new version of the EV federal tax credit makes changes to how the credit is calculated.
Federal tax credit for EVs maintained at $7,500
The tax credit for EVs will be doubled after the manufacturers sell 200,000 vehicles. The previous rule of the AC cap restricting automakers to no more than 200,000 EVs sold is repealed after Tesla and General Motors reach this threshold.
This is the text of the bill concerning this proposed tax credit. The idea’s language indicates a credit would be implemented on the point of sale (when you bought something) instead of directly on your taxes.
To get full credit for an electric vehicle, it must be assembled in North America, most of the components need to come from America, and some of the minerals come from countries with free trade agreements with the US.
A new federal tax credit of $4,000 for used EVs
Zero-emission vans, SUVs, and trucks with MSRPs up to $80,000 qualify.
Electric sedans priced up to $55,000 MSRP qualify.
As of the beginning of next month, the full EV tax credit will be available to individuals with adjusted gross incomes of $150,000 or less, and $300,000 for joint filers.
. In Tesla’s case, the new $55,000 price limit would only apply to versions of the Model 3 that weren’t part of the agreement between Tesla and GM.
The new limit on gross income has also been greatly reduced.
However, Manchin’s support is a big step towards finally introducing this bill. It took over a year of negotiation before it could be introduced to the Senate, but with its new support, it could pass through the legislative process relatively quickly.
