The U.S. Senate Finance Committee advanced legislation on Wednesday that would boost electric vehicle tax credits to as much as $12,500 for EVs that are assembled by union workers in the United States.
The bill would limit tax credits to vehicles with a retail price below $80,000 to qualify for the tax credits. The current maximum tax credit is $7,500 with no maximum price and currently phases out for individual automakers once they hit 200,000 total EVs sold.
Both General Motors and Tesla have hit the cap and currently do not qualify for the $7,500 tax credit.
The “Clean Energy for America” bill, which advanced on a 14-14 tie vote, would eliminate the existing EV cap, while the credit would phase-out over three years once 50% of U.S. passenger vehicle sales were EVs. It has numerous other green energy tax incentives and would rescind or cut many fossil fuel tax provisions.
The EV proposal led by Senator Debbie Stabenow, a Michigan Democrat, would boost the $7,500 tax credit by $2,500 for vehicles assembled in the United States and another $2,500 for cars at facilities whose production workers are members of, or represented by, a labor union.