GREEN Act Gives Tesla and GM a New $7,000 Tax Credit
The Biden administration just made a Tesla Model 3 under $30,000 a reality as Tesla will gain access to another 400k $7,000 EV tax credits through the Biden administration’s GREEN Act.
As Simon Alvarez explains from Teslarati that under the GREEN Act, the electric vehicle credit cap for automakers would be increased to 600,000 cars, though the tax credit becomes $7,000 per vehicle after the first 200,000 EVs are sold. Considering that Tesla and GM have already passed the 200,000-vehicle threshold, 400,000 more customers in the United States would receive a tax credit of $7,000. This should make Tesla’s electric cars far more attainable, with the Model 3 essentially being priced below $30,000 with the tax credit in place.
Following is the GREEN Act’s section on electric vehicles and the extended US incentive.
“The bill also extends existing tax incentives available for the sale of electric vehicles. The bill increases the electric vehicle credit cap for manufacturers to 600,000 vehicles, but reduces the credit by $500 after the first 200,000 vehicles sold. This would replace the current phaseout period that begins with 200,000 vehicles sold, with a phaseout period that instead begins during the second calendar quarter after the 600,000-vehicle threshold is reached.
“At the start of the new phaseout period created under the bill, the credit is reduced by 50 percent for one calendar quarter and subsequently ends. For manufacturers that already passed the 200,000 threshold before the enactment of the bill, the number of vehicles sold in between 200,000 and those sold on the date of enactment are excluded in determining when the 600,000 threshold is reached.”
Some people tweet and comment about this new Tesla tax credint saying, "There should be a guarantee when you purchase the car that you’ll receive the tax credit. If 500,000 people buy a Tesla this year, then how do they determine which 400,000 get the tax credit when filing their tax returns in 2021?"
To this question, the answer is that, it apparently phases out end of the quarter after the limit is reached, plus only US cars count. Cars delivered before a certain date will get the credit.
Does anyone know if this will be retroactive beginning Q1 2021? If retroactive, then some people who have purchaced a Tesla or a Chevy Bolt in Q1, may need to have to file amended tax returns.
Armen Hareyan is the founder and the Editor in Chief of Torque News. He founded TorqueNews.com in 2010, which since then has been publishing expert news and analysis about the automotive industry. He can be reached at Torque News Twitter, Facebok, Linkedin and Youtube.