Shifting political winds during the U.S. November mid-term elections could spell trouble for automakers’ hopes of getting billions of dollars in consumer tax credits. That would help the United States compete with Chinese and European rivals. General Motors Co (GM.N), Ford Motor Co (F.N), Chrysler-parent Stellantis NV (STLA.MI), and Toyota Motor Corp (7203.T) have pledged to invest more than $170 billion through 2030 to bolster EV development, production and sales.
Automakers are making a furious last-ditch effort to convince Congress to approve an extension of EV incentives before Republicans. Who are largely opposed to doling out EV subsidies, might take over both houses of Congress next year.
Without those incentives, particularly an extension of a $7,500 EV purchase tax credit. The U.S. auto industry will fall behind on the Biden administration’s goal of 50% EV sales by 2030, auto executives, lawmakers and consultants says.In April, Senator Joe Manchin, a key Democrat, questioned the need to extend electric vehicle tax credits in the face of strong consumer demand. Automakers and their supporters are now holding intensive discussions on Capitol Hill to win support, with backing from the White House, said U.S.
Unless Congress acts, more automakers will lose access to the $7,500 U.S. EV tax credit. That indirect subsidy currently phases out after a manufacturer sells 200,000 electric vehicles. GM and Tesla have already hit the cap, and other automakers, including Ford and Volkswagen AG (VOWG_p.DE), are expected to soon hit the threshold.
Those conditions have spelled trouble for automakers in the past. In a letter to Congress last week, the chief executives of GM, Ford, Stellantis, and Toyota urged lawmakers to act. Last week, Ford Executive Chairman Bill Ford made an unannounced trip to Capitol Hill to make the case for extending the tax credit.