Federal EV tax credit may double upon return in a boon for Tesla

The federal EV tax credit is gone, and one House Democrat wants it back at twice the size, citing exorbitant gas prices. Rep. Greg Landsman of Ohio introduced the 21st Century Vehicle Choice Act on October 22. It would raise the new EV credit from $7,500 to $15,000 and the used EV credit from $4,000 to $8,000, both as a permanent fixture.

After the incentives ended under the Republican tax and spending law last fall, US demand cooled quickly, and Tesla's cheaper Standard trims could only do so much to cushion the blow.

The bill also drops income caps to $225,000 for married couples filing jointly, $169,000 for heads of household, and $112,500 for single filers. The $15,000 figure is also a ceiling, as it is split into two $7,500 halves, and a car has to meet both battery and material sourcing requirements to earn the full amount. That list has always been short, so how many Teslas would actually qualify remains to be seen. Also, anyone who has claimed the credit in a prior year would reportedly get nothing.

Tesla would still stand to gain the most, as it sells more EVs in the US than anyone, and the Model 3 and Model Y sit in the price range where a bigger credit matters most. Double the used electric vehicle credit could also help the large secondhand Tesla market.

Other than the grand $15,000 EV tax credit bill, no less than 160 House Democrats backed a separate proposal from Reps. Sean Casten and Mike Levin, which would restore the old $7,500 credit running through 2032, as it was originally intended. Landsman's version has no cosponsors listed so far, but both bills are sitting in committee, and House Democratic leaders have not committed to an EV plan.

Even if Democrats win control of Congress in the midterms, a bill like this may still need a presidential signature. For now it is a rather plausible scenario that gives future EV owners hope that the federal EV tax credit could make a grand return either in its original form or at double the subsidy amount to spearhead EV adoption.

Get the Tesla Universal Wall Connector with 24' Cable on Amazon