Slipped in amongst other budget saving measures in the 150-page 2020 fiscal year budget proposed by the Trump Administration was “Repeal the qualified plug-in electric drive motor vehicle credit.” According to the data provided in the proposal, if tax credits for electric vehicles (EV) were cut, the government could save a whopping $2.5 billion by 2029.

This repeal, among others, is aimed at balancing the US budget, which has currently reached $22 trillion. “All across America, hardworking taxpayers balance their household budgets, find ways to do more with less, and still manage to save for the future,” the White House tweeted Monday. “Washington should treat their tax dollars the same way. President Trump’s 2020 Budget will do just that.”

As of right now, manufacturers can provide a tax credit to customers purchasing EVs to the tune of $7, 500 the year after they buy. This opportunity, which was introduced in 2009, lasts until the company has sold 200,000 EVs, at which point the credits are halved for six months and then halved once more before they’re no longer available.

tax creditsTo date, GM and Tesla have both reached the first milestone, and have been lobbying with Nissan to extend the credit cut-offs so the playing field remains level as more companies join the EV trend. Last year at the CERAweek Energy Conference in Houston, GM CEO Mary Barra explained that “In the U.S., the current federal tax credit helps make electric vehicles more desirable and affordable… However, we feel tax credits should be expanded so our customers continue to receive the benefit going forward.”

This is not the first attempt to curb the EV and other related tax credits. In October of 2018, Senator John Barrasso (Republican, Wyoming) proposed a bill to that end. Writing in the Investor’s Business Daily, the senator said, “Time’s up on the electric car subsidy. The foundation for automakers to create a sustainable electric-vehicle market exists. Taxpayers should be off the hook.” He further contended that “Ending subsidies for specific vehicle types isn’t just about saving taxpayer money — it’s also about fairly spreading the burden on taking care of America’s roads.”

Later in the year, Larry Kudlow, the White House Chief Economics Officer also brought up cutting the incentives, and then the president did as well, mostly in reference to GM. He felt that the company should lose its credits after they announced they were cutting jobs and moving some of their operations over to Mexico.

Lately, EVs have been frequently in the news as more brands are coming on board with the technology. Additionally, several states have committed to reaching zero emissions, which has led them to offer incentives and quotas for selling EVs as well as installing more plug-in charging stations. Tax credits have helped attract some buyers as well, though for how much longer is now in doubt. It remains to be seen how the budget will be received.

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