Energy

GOP Embroiled In A Civil War Over Electric Car Subsidies

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Jason Hopkins Immigration and politics reporter

Despite traditional GOP opposition to electric vehicle (EV) subsidies, one Republican senator is reportedly set to introduce a bill that will lift caps for EV tax credits.

Under current law, EVs are eligible for a tax credit of up to $7,500. However, manufacturers are no longer eligible for this credit once they reach the threshold of 200,000 EVs sold. Nevada Republican Sen. Dean Heller is preparing to introduce “legislation that would lift the current cap on electric vehicles eligible for tax credits,” according to Reuters, which obtained a copy of the bill. Under his proposal, this cap would be extended until 2022, and then phase out the credit entirely for the industry.

U.S. Treasury Secretary Steven Mnuchin testifies to the Senate Banking, Housing and Urban Affairs Committee in Washington

GOP Sen. Dean Heller of Nevada questions U.S. Treasury Secretary Steven Mnuchin as he testifies to the Senate Banking, Housing and Urban Affairs Committee on “The Financial Stability Oversight Council Annual Report to Congress” on Capitol Hill in Washington, U.S., Jan. 30, 2018. REUTERS/Joshua Roberts

The upcoming bill is not as generous as legislation proposed by some liberal lawmakers in the upper chamber — Oregon Democratic Sen. Jeff Merkley introduced a bill, the Electric Cars Act of 2018, in September that calls for extending the tax credit for another ten years. However, Heller’s bill is a major deviation from other Republican lawmakers who not only oppose lifting the caps, but want to see the subsidies end altogether.

“The electric vehicle tax credit largely benefits the wealthiest Americans and costs taxpayers billions of dollars,” stated Wyoming Republican Sen. John Barrasso, the chairman of the Senate Environment and Public Works Committee and sponsor of legislation that would end the tax credit. “My legislation levels the playing field for all drivers across America.”

Barrasso is joined by other GOP lawmakers in his criticism of federal subsidies for the EV industry.

“I wouldn’t be supportive of any legislation to extend the credits,” Pennsylvania Republican Sen. Pat Toomey told The Hill in September. “The government shouldn’t be interfering in people’s choices of vehicles based on the merits.”

The battle over whether to extend a lifeline to EVs comes as several major manufacturers have passed, or are about to pass, the threshold to receive full tax credits. Tesla passed the 200,000 vehicle cap in July, resulting in its tax credits getting reduced to 50 percent for six months and then reduced again to for another six months. GM expects to reach this threshold by the end of 2018. (RELATED: California May Give Electric Car Owners Even More Taxpayer Cash)

Tesla has a very large presence in Nevada. The electric car maker operates its “Gigafactory” in Storey County, Nevada, a manufacturing facility which employs over 3,000 people.

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