(TNS) – Legislation from Michigan Senator Debbie Stabenow, D-Lansing to increase the electric vehicle tax credit to $ 12,500 for the next five years was passed by a Senate committee Wednesday.
The provision would expand the $ 7,500 tax credit for vehicles priced less than $ 80,000, remove the cap for automakers, and add $ 2,500 for union-built cars and $ 2,500 for US-assembled vehicles.
Currently, consumers who purchase the first 200,000 electric vehicles from an automaker receive up to $ 7,500 in tax credits, not capped by the price of the vehicle. General Motors Co. and Tesla Inc. have already reached their caps.
“We know our automakers and workers are the best in the world. They’re making the private sector investments necessary to electrify our industry so we can compete and win. But they can’t do it alone,” Stabenow said during one Committee hearing Wednesday. “And frankly, there are hundreds of companies in China that make electric vehicles and they have help – over $ 100 billion in aid so far from the Chinese government.”
Stabenow’s legislation was incorporated into the Clean Energy for America Bill, which aims to promote clean energy through tax incentives, which the Senate Finance Committee passed by 14-14 votes on Wednesday afternoon. Several Republicans argued that the bill “picks winners and losers” by encouraging renewable energy sources over oil and gas sources.
Electric vehicle consumer tax credits are expected to cost around $ 31 billion over the next decade.
President Joe Biden has proposed $ 100 billion in tax credits for buying electric vehicles, stating that those incentives shouldn’t apply to luxury cars. He also advocated a call by United Auto Workers that federal subsidies not apply to vehicles assembled outside of the United States
“Today, Debbie Stabenow and the Senate Democrats stood up for American work and protected future well-paying union jobs by reporting it outside of the committee,” UAW President Rory Gamble said in a statement. “This legislation ensures once and for all that federal investment in the production of electric vehicles directly creates the well-paid union jobs of the future president, for whom President Biden has advocated.”
Stabenow’s legislation also provides a tax credit of 30% for manufacturers to convert old systems or build new ones in order to produce new energy technologies such as batteries and semiconductors for electric vehicles. A semiconductor shortage caused by the coronavirus pandemic has disrupted work at plants across the country and is expected to result in millions fewer vehicles being built this year than planned.
“The important thing is that it will help our manufacturers to build parts like semiconductors so that we don’t see the bottlenecks we see today,” said Stabenow. “Today we are taking a big step from the past into a better future.”
Republicans on the committee expressed frustration at the lack of bipartisan effort for the overall package.
“We’re in a 50:50 Senate. And I would certainly hope we can find more common ground that gets a good, strong, bipartisan vote,” said Senator Steve Daines, R-Montana.
“This bill is far from a free market bill,” said Senator John Cornyn, R-Texas. “This is an ideological jihad against the status quo, in which many, many jobs in our country depend on the oil and gas sector.”
The bill has yet to be reviewed and approved by the entire Senate, the US House, and signed by the President to become law.
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