The tax credit of $12,5000 was included in the most recent version of the Build Back Better plan released under Biden’s administration. With this America will be pushing its goals towards climate goals and offering millions of jobs for citizens as the economy grows. The plan includes further goals like economic shortcomings, climate, and healthcare.
The $12,500 electric vehicle tax credit is revised from the previous $7,500 credit for electric vehicles. The reintroduction could change the automotive industry as the reduction would reduce the overall cost of the vehicle. Biden is to announce on Saturday as Senate Democratic holdouts are spending on the $1.75 trillion bills.
Since early 2021, the EV tax credit has been speculated and being rerevised multiple times. However, the question about the qualifying cars for every manufacturing company was still there. Now it is being revised from 200,000 vehicles to 400,000 vehicles. While the amount of incentive seems to be almost fixed at $12,500, it is subjected to changes till the bill “Clean Energy for America” will be passed. The tax credit will be for vehicles that cost less than $80,000. Its division is such that $7,500 for the EV, vehicle assembly amounts to $2,500 and factories with worker members of a labor union will have an additional $2,500.
Clean Energy tax credits
The revised version appears to be in much better shape as the drastic portion was scrapped, while EV tax credits remain in the segment. Clean Energy Tax Credits will have a total expenditure of $320 billion in the coming ten years. Stated that the credit is for utility-scale and residential clean energy. Where transmission, clean passenger, and commercial vehicles are also included in the tax credits.
The White House writes, “The consumer rebates and credits included in the Build Back Better framework will save the average American family hundreds of dollars per year in energy costs. These measures include enhancement and expansion of existing home energy and efficiency tax credits, as well as the creation of a new, electrification-focused rebate program.” Furthermore, it includes the cost cuts and electric vehicle tax credit, “The framework will cut the cost of installing rooftop solar for a home by around 30 percent, shortening the payback period by around 5 years; and the framework’s electric vehicle tax credit will lower the cost of an electric vehicle that is made in America with American materials and union labor by $12,500 for a middle-class family. In addition, the framework will help rural communities tap into the clean energy opportunity through targeted grants and loans through the Department of Agriculture.”