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Merkley, Welch Introduce Bicameral Legislation to Accelerate Growing Adoption of Electric Vehicles

February 23, 2021
Press Release
Extension of electric vehicle tax credit will slash dangerous pollution driving climate crisis

Washington, D.C. – Oregon’s Senator Jeff Merkley and Congressman Peter Welch (D-VT) teamed up today to introduce the Electric Cars Act, bicameral legislation that would address America’s addiction to dangerous fossil fuels by fully extending the electric vehicle tax credit for 10 years and helping to deploy critical charging infrastructure.

Currently, a federal tax credit of up to $7,500 is available for the purchase of electric vehicles—with federal statute capping the number of eligible vehicles at 200,000 per manufacturer. Several domestic manufactures have already hit the manufacturing cap and consumers seeking to buy those vehicles will no longer receive tax credits. As a result, the law currently creates incentives for electric car buyers to purchase imported vehicles rather than American-made ones.

“As climate chaos continues to ramp up with record-setting winter storms, violent hurricanes, and catastrophic wildfires, it is imperative that we transition away from gasoline-powered vehicles, which are fanning the flames of the crisis,” said Merkley. “Consumers are already looking for electric cars, and this bill will help drive adoption faster—and make sure more of those cars are made by American workers in American factories.”

“We need to quickly and aggressively invest in electric vehicles to combat the global climate emergency that threatens all of our local communities,” said Welch. “Owning an electric vehicle can be cheaper and offers significant public health and environmental benefits, but for many Americans they are unaffordable at the dealership. This bill makes the next generation of electric vehicles accessible to more people by allowing them to receive the electric vehicle tax credit right away. Encouraging electric vehicle adoption is a common sense win for consumers, the environment, and American workers.”

The transportation sector is now the largest source of greenhouse gas pollution in the United States, and a significant source of carbon pollution worldwide. Countries across the globe have recognized this challenge and are aggressively investing in electric vehicle technologies in order to bolster fuel security, reduce pollution, and improve health outcomes. Nearly a dozen countries and dozens of cities have committed to phasing out internal combustion engines. The U.S., however, is at risk of falling behind on technology development and deployment of electric vehicles.

The electric vehicle (EV) tax credit has been instrumental in helping advance the American EV market, and ensures that consumers have a greater range of options when selecting their next vehicle. Given global efforts to transition away from internal combustion engines, the U.S. should not hamstring the production and support of domestically manufactured electric vehicles.

The Electric Cars Act would improve this vital tax credit by:

  • Eliminating the per manufacturer cap, allowing consumers access to the tax credit for the next 10 years, regardless of the manufacturer from which they purchase their car;
  • Allowing buyers to use the tax credit over a 5-year period, or apply the credit on the spot at the dealership to reduce the price of the vehicle, making the credit more applicable to those without large tax liability; and
  • Providing a 10-year extension of tax credits for alternative fuel vehicles and charging infrastructure to incentivize the buildout of this important infrastructure around the country.

In addition to Merkley and Welch, the legislation is cosponsored by U.S. Senators Cory Booker (D-NJ), Bernie Sanders (I-VT), Jacky Rosen (D-NV), Brian Schatz (D-HI), and Patrick Leahy (D-VT) in the U.S. Senate, and Representatives Ro Khanna (D-CA-17), Paul Tonko (D-NY-20), Matt Cartwright (D-PA-8), Gerry Connolly (D-VA-11), Emanuel Cleaver II (D-MO-5), Chellie Pingree (D-ME-1, Mary Gay Scanlon (D-PA-5), Debbie Wasserman Schultz (D-FL-23), Salud Carbajal (D-CA-24), Raul Grijalva (D-AZ-3), Doris Matsui (D-CA-6), Sean Casten (D-IL-6), and Jared Huffman (D-CA-2) in the U.S. House of Representatives.

Full text of the legislation is available here.

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