US Senate members introduced the “Clean Energy for America” bill this week, aiming to improve benefits for purchasing EVs across the nation.
The US Senate Finance Committee has cleared the path for a new bill that aims to boost the tax credit for buying an EV to $12,500, up from the current $7,500. However, automakers must fulfill some conditions to be eligible. First, an additional $2,500 will be granted if the vehicle is assembled on American soil. And secondly, another $2,500 if manufactured in factories whose workers are represented by a labor union.
In simple words, EVs manufactured outside the US will only be eligible for a $7,500 incentive. Meanwhile, Tesla, whose workers do not belong to American unions, would receive $10,000 credit. Finally, vehicles that fulfill all the required conditions, such as the Ford F-150 Lightning, would be granted a complete $12,500 subsidy.
Moreover, the scheme is only applicable for EVs whose price falls under the $80,000 mark. The bill also puts an end to the existing market cap of 200,000 vehicles. These incentives will gradually be put on hold when 50% of America’s annual sales consist of battery electric vehicles.
Also, President Joe Biden has announced $174 billion for EVs and their required infrastructure, including charging stations. Out of the considerable sum, $100 billion will go towards customer grants. As per estimates, the EV subsidies should cost $31.6 billion through the decade.
The approval would be a big step for the country, with plenty of EVs set to arrive in the upcoming months. It also creates a great opportunity for potential buyers and companies to make the most out of it. Furthermore, the bill will grant a 30% tax rebate to companies who establish new plants to produce advanced energy technologies, such as batteries.
The US Senate advanced the bill on a 14-14 party-line vote, but to become a law, it needs additional validation by the full Senate and the US House of Representatives.
