Electric vehicle advocacy groups on Tuesday urged the U.S. House of Representatives to reject or amend a Senate-passed bill that would terminate key federal tax incentives for EV buyers, warning that the move would jeopardize American industry and national competitiveness.
The bill would eliminate the $7,500 federal tax credit for new electric vehicle purchases and the $4,000 credit for used EVs, effective September 30. It passed the Senate amid growing political scrutiny over clean energy subsidies.
The Electrification Coalition, a policy group promoting EV adoption, criticized the bill as damaging to U.S. interests. “Driving much of the nation’s manufacturing investment at this critical juncture would effectively wave the white flag of defeat, ceding control over the future of transportation to China,” the group said in a statement. “The House must reject this act against the interest of the American people.”
Calstart, a nonprofit organization advocating for clean transportation, also condemned the legislation. “The Senate vote to cut clean transportation tax credits undermines American jobs and puts American workers and manufacturers at a disadvantage, just as global competitors accelerate the transition toward a zero-emission transportation economy,” it said.
While many in the auto industry criticized the repeal of consumer tax credits, the Alliance for Automobile Manufacturers expressed support for parts of the Senate bill. The group, representing General Motors, Ford Motor, Toyota, Volkswagen, and others, welcomed revised language on a battery production credit. It said the update “preserved auto-related advanced manufacturing across the country and prohibited Chinese companies from eligibility.”
Ford Motor previously raised concerns over the House version of the bill, warning it could imperil a $3 billion battery plant project in Marshall, Michigan, that is 60% complete and expected to create 1,700 jobs.
Separately, the Senate measure also provides relief for automakers by eliminating penalties for failing to meet Corporate Average Fuel Economy (CAFE) standards. That change would make it easier to continue producing internal combustion engine vehicles alongside EVs.
In recent years, several major automakers have paid millions in penalties for fuel economy shortfalls. Stellantis paid $190.7 million for violations in 2019 and 2020, after nearly $400 million in penalties from 2016 to 2019. General Motors paid $128.2 million for 2016 and 2017.
