The Biden administration is looking to increase the upper limit for the number of subsidised electric vehicles per manufacturer. The bill called the Growing Renewable Energy and Efficiency Now (GREEN) Act, would benefit manufacturers such as Tesla and GM.
The GREEN Act would triple the electric vehicle credit cap for carmakers to 600,000 cars, though the tax credit becomes $7,000 per vehicle after the first 200,000 EVs are sold. Given that Tesla, for example, has passed the 200,000-vehicle threshold long ago, this would make another 400,000 more customers eligible for the tax credit. The Model 3 would finally fall below the $30,000-mark after the subsidy.
Once 600,000 sales are reached, the phase-out phase sets in as before. Reads the bill: “At the start of the new phaseout period created under the bill, the credit is reduced by 50 per cent for one calendar quarter and subsequently ends. For manufacturers that already passed the 200,000 threshold before the enactment of the bill, the number of vehicles sold in between 200,000 and those sold on the date of enactment is excluded in determining when the 600,000 threshold is reached.”
It looks as though however that these subsidies will not be applied retroactively as the bill only speaks of qualified plug-ins sold “after the date of the enactment of the GREEN Act of 2021”. At the same time, the transition period has been given as December 2009 in the text so we are waiting to find out more.
President Biden’s advance is not entirely new. A bill called the Driving America Forward Act had been introduced by senators from both parties, Democrats and Republicans in 2019, providing for the same conditions as above. Only then President Trump had later abandoned the plan as part of his pushback on climate-protection.
The Biden administration since in office has been busy with unravelling and reversing these policies. The President issued an executive order that essentially put climate-change at the heart of the Nation’s agenda. Section 109 asks all government agencies to identify any fossil fuel subsidies provided, and then “take steps to ensure that, to the extent consistent with applicable law, Federal funding is not directly subsidizing fossil fuels.” The new GREEN act also includes and extends provisions for solar or wind and other forms of renewable energy to help with investments.
Perhaps that is why Tesla CEO Elon Musk felt endeared to propose a carbon tax to President Biden. Electrek quotes an podcast with Joe Rogan. Musk said: “I talked to the Biden administration [about implementing a carbon tax] and they were like ‘Well, this seems to be too politically difficult’.”
The Tesla boss is not the only one who has been promoting the idea. Even Volkswagen CEO Herbert Diess has been calling for taxation – in his case to increase the existing one. In the US, Tesla would like to see the tax being applied at the point of consumption, i.e. at a pit-stop, something that has been happening tentatively in Germany already. A carbon tax on electricity generated from coal and natural gas and gasoline would naturally benefit Tesla, although it would increase SpaceX costs.
On more green notes, federal legislation to create a state-wide tax incentive for electric bicycles was introduced this week as part of the Electric Bicycle Incentive Kickstart for the Environment (E-BIKE) Act. Representatives Earl Blumenauer (D-OR) and Jimmy Panetta (D-CA) took charge on it and hope to sign a 30% tax credit of up to $1,500 for buying an electric bicycle into law. An eligible electric bicycle would have to cost less than $8,000, which is, of course, the vast majority of pedelecs in the US. In most states, electric bicycles still qualify as such with pedal assist support to up 30 mph (45 kph) and up to 20 mph (32 km/h) with a hand throttle – on the continent, this would place in the category electric moped/e-bike or speed pedelec.
Any bills still have to undergo the legislative process, but with the Democrats now holding both Houses, the chances are that change will come.