Correction below. The base tax credit will remain at $4,000. The tax credit for the Tucson Plug-in Hybrid will drop to $4,000.
Bad news. In the Build Back Better (BBB) Act as passed by the House the tax credit for PHEVs is reduced to ZERO. Forbes is correct, and only PHEVs with a gas tank smaller than 2.5 gallons will receive a $4,000 tax credit.
Congress aims to revamp consumer incentives for plug-in electric vehicles
The BBB Act now goes to the Senate, where it can be modified. (There is no conference committee.) I am reaching out to as many Senators and publications as possible to try and enlist their aid to retain as much of the PHEV tax credit as possible. The points I am making are:
- The Bipartisan Infrastructure bill that was recently passed and signed into law includes billions of dollars to kick-start the buildout of a nationwide EV charger network, but it will take years for the buildout to achieve any significant mass.
- EV battery charging technology is improving, but charging is still a slow process.
- Without a tax credit for PHEVs, and without a practical charging ecosystem for EVs, many potential buyers of PHEVs will buy Hybrid Electric Vehicles (HEVs) instead of PHEVs or EVs. This will actually reduce the amount of electrification in the U.S. auto fleet.
- Any reduction in the tax credit for PHEVs should be deferred until the buildout of the EV charging network reaches a defined threshold and EV battery charging speed achieves a stated minimum.
It would be great to retain the current tax credit of up to $7,500 for PHEVs, but at a minimum a $4,000 tax credit should be provided.
If you are planning to buy a Tucson Plug-in Hybrid, please join me in contacting as many senators (and automotive publications) as possible and asking them to retain some or all of the tax credit for PHEVs. If one or both of the senators representing your state are Democrats, be sure to contact them as a constituent. I would suggest contacting Senators Schumer, Manchin, Merkley, Schatz, Warren and Booker. This League Of Conservation Voters scorecard might suggest other senators to contact. (Select Senate | Democrat | 2020 | Transportation and sort on the scores.)