Cutting federal tax credits would likely kill EV market, Edmunds says
With the White House not expected to extend electric vehicle tax credits and Congress unwilling to fight for them, EV sales will probably tank, says a recent report by Edmunds.com.
Buyers of qualified plug-in electric vehicles have been eligible for a $7,500 tax credit since 2010. The first 200,000 buyers for each automaker can get the credit. No company has used up its credits so far, though General Motors is expected to run out (for its Bolt and Volt) in late 2018 or 2019, the report says.
Without these credits, this market is likely to crash, the report says. It uses Georgia as an example. The state offered a $5,000 tax credit for zero-emission vehicles in addition to the federal credit. But when the state credit was eliminated in July 2015, Georgia went from providing 17 percent of US EV sales to 2 percent.
The Georgia data, with Edmundsê online sales data, shows that EV buyers are more motivated by discounts and manufacturer incentives than by environmental motives. But, says Edmunds, there are two markets for EV sales high-end and mainstream. The high end, not surprisingly, will weather the loss of subsidies better.
Plug-in vehicle buyers, a separate market, depend more on subsidies. Overall, the same obstacles that have existed for years still remain before EVs can achieve higher sales: lack of infrastructure and insufficiently long-range batteries.Download Bulletin PDF