A potential expansion of the EV tax credit has reportedly been shut down by President Donald Trump, according to Bloomberg.
Currently, a $7,000 tax credit is available for manufacturers until they have sold 200,000 electric vehicles. The proposal would extend the full $7,000 tax credit for an additional 400,000 vehicles, a big help to companies like Tesla and GM that have crossed the 200,000 mark.
Bloomberg reported:
White House officials warned lawmakers that if they tried to expand the electric vehicle credit as part of a compromise spending bill, it could tank the measure, according to two people familiar with the matter. The issue is particularly heated in the West Wing and among conservatives who view the credit as mainly benefiting rich Californians and Tesla.
Michigan Senator Debbie Stabenow told Bloomberg that “There has been extreme resistance from the president.”
The news is a blow to both Tesla and consumers looking to purchase Tesla’s promised affordable EV. The credit would have made the base Model 3 available for about $33,000. Tesla will now have to compete with a growing field of EVs from range of manufacturers that still qualify for the full rebate.
Under the current law, the EV credit phases out over four quarters after the manufacturer hits the 200,000 mark.
Tesla recently sent an email warning potential buyers that the current $1,875 credit available for its vehicles will be expiring at the end of the year.
