The Biden administration’s push for environmental sustainability is coming into focus with benefits for electric vehicle buyers. The administration’s GREEN Act (Growing Renewable Energy and Efficiency Now) would increase the electric vehicle credit cap to 600,000 cars per manufacturer.
The GREEN Act would also create a new credit for zero-emission heavy-duty trucks and buses, which would equal 10% of the sales price up to $1 million. The credit applies to vehicles weighing more than 7 tons (14,000 lbs.) that are powered by an electric motor. CNG and propane-powered vehicles are exempted.
The $7,500 cap remains for electric passenger vehicle sales up to 200,000 per manufacturer, after which a $7,000 credit phases in up to 600,000 units sold.
The program would allow 400,000 new GM and Tesla customers to access the $7,000 credit. Both manufacturers surrendered the credit after passing the 200,000-vehicle sales threshold under the current incentive tax program. With the credit, a Tesla Model 3 would be priced below $30,000.
The GREEN Act extends or expands existing renewable energy tax credits for solar, wind, and hydro power, including a five-year extension of the solar Investment Tax Credit (ITC). The House Ways and Means Committee introduced the GREEN Act on Feb. 5.
The bill, an update of a similar bill that failed to pass during the last Congress, may have a better chance with a Democrat-controlled House, Senate, and White House.
“A new EV credit could arrive just as a wave of new EVs, many from new EV companies, are hitting the market,” said Karl Brauer, executive publisher, CarExpert.com. “Many of these new EVs will, for the first time, be trucks and SUVs, making both the vehicles and the EV credit appealing factors for fleet buyers.
“This combination of factors could dramatically increase demand for EVs, and with a 600,000-unit threshold before the credit begins to expire we could see widespread implementation of EVs replacing traditional fleet vehicles, a goal President Biden has specifically called out for federal vehicles in recent weeks,” Brauer said.