Bipartisan senators offer bill to expand electric vehicle tax credit

About three times as many Americans could benefit from tax credits for electric vehicles under legislation introduced Wednesday by a bipartisan group of senators.

Consumers who buy an electric car are eligible for a $7,500 tax credit, but the credit is phased out for those who buy vehicles from an automaker that exceeds 200,000 sales.

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Two automakers have already surpassed the cap, prompting lawmakers to propose a new threshold of 600,000 sales per company.

Tesla hit the cap in 2018, and General Motors Co. joined them earlier this year, meaning people who buy electric vehicles from those companies will get smaller tax credits.

“This legislation would continue the momentum towards cleaner transportation and help tackle harmful transportation emissions,” Sen. Susan Collins (R-Maine), a co-sponsor of the bill, said in a statement.

The bill, backed by Sens. Debbie Stabenow (D-Mich.), Lamar Alexander (R-Tenn.) and Gary Peters (D-Mich.), would give a $7,000 tax credit to the next 400,000 buyers after the first cap is hit.

Rep. Ro KhannaRohit (Ro) KhannaDems eye repeal of Justice rule barring presidential indictments Dems eye repeal of Justice rule barring presidential indictments Congress must use upcoming defense bills to guard against a confrontation with Iran MORE (D-Calif.) announced earlier this month he plans to introduce similar legislation. Under his forthcoming bill, the credit would be fully refundable at the time of purchase, but it would be linked to automobile companies’ production in the United States.

The Senate measure has the backing of automakers and environmental groups, but similar legislation has been opposed by some Republicans and President TrumpDonald John TrumpTrump cites tax cuts over judges as having biggest impact of his presidency Trump cites tax cuts over judges as having biggest impact of his presidency Ocasio-Cortez claps back at Trump after he cites her in tweet rejecting impeachment MORE.

Trump's fiscal 2020 budget proposal calls for repealing the credit, which the administration estimates would reduce the federal deficit by $2.5 billion over 10 years.

When legislation to raise the sales cap was introduced last year, and sponsored only by Democrats, Sen. Bill CassidyWilliam (Bill) Morgan CassidyBottom line Bipartisan senators reveal sweeping health care package Senate passes bill to undo tax increase on Gold Star military families MORE (R-La.) likened the credits to a bailout for Tesla. He said his biggest issue with the current system is the kind of buyer who benefits from the cut.

“That is a credit of lower-income Americans for higher-income Americans. The guy buying the Tesla can afford $100,000 for a car, but the person who is making $30,000 is out the credit. I actually look at those as a subsidy for the rather wealthy,” Cassidy told The Hill at the time.

Supporters of the tax credit argue that continued government support is needed.

"It’s still not yet a mature market," Jason Hartke, president of the Alliance to Save Energy, said in a statement Wednesday. "Without congressional action, the current incentives are essentially expiring, and that’s likely to stunt the growth of electrical vehicles in the U.S. and damage our leadership in a rapidly growing auto sector.”