WASHINGTON (Reuters) - White House economic adviser Larry Kudlow said on Monday the Trump administration wants to end subsidies for electric cars and other items, including renewable energy sources.
A Tesla is charged at an electric car supercharger station in Los Angeles, California, U.S. August 2, 2018. REUTERS/Lucy Nicholson
Asked about plans after General Motors Co (GM.N) announced U.S. plant closings and layoffs last week, Kudlow pointed to the $2,500-to-$7,500 tax credit for consumers who buy plug-in electric vehicles, including those made by GM, under federal law.
“As a matter of our policy, we want to end all of those subsidies,” Kudlow said. “And by the way, other subsidies that were imposed during the Obama administration, we are ending, whether it’s for renewables and so forth.”
Asked about a timeline, he said: “It’s just all going to end in the near future. I don’t know whether it will end in 2020 or 2021.”
The tax credits are capped by Congress at 200,000 vehicles per manufacturer, after which the subsidy phases out. GM has said it expects to hit the threshold by the end of 2018, which means under the current law, its tax credit scheme would end in 2020. Tesla Inc (TSLA.O) said in July it had hit the threshold. Other automakers may not hit the cap for several years.
Experts say the White House cannot change the cap unilaterally. U.S. President Donald Trump last week threatened to eliminate subsidies for GM in retaliation for the company’s decision.
Kudlow made clear any changes in subsidies would not just affect GM. “I think legally you just can’t,” he said.
Democrats will take control of the U.S. House in January and are unlikely to agree to end subsidies for electric cars and many have been pushing for additional incentives.
Tesla and GM have lobbied Congress for months to lift the cap on electric vehicles or make other changes, but face an uphill battle make changes before the current Congress expires.
In October, Senator Dean Heller proposed lifting the current cap on electric vehicles eligible for tax credits but phase out the credit for the entire industry in 2022. Two other senators in September proposed lifting the per manufacturer credit and extending the benefit for 10 years.
Also in October, Senator John Barrasso a Republican who chairs the Senate Environment and Public Works Committee, proposed legislation to end the EV tax credit entirely.
slizzbucket on December 4th, 2018 at 07:05 UTC »
A lot of people in this thread are saying that, because EVs have become technologically mature, there is no longer any reason to subsidize them. The point of subsidies, generally speaking, is to encourage things with a public good. Given that reducing global warming emissions is important for protecting civilization, subsidizing EVs likely does benefit the public. Obviously you could argue about whether it's the best use of public resources versus other uses - maybe it would be better to spend that money on solar panels, or on tax cuts, or whatever - but it's a narrow view of the use of subsidies to say that simply because EVs are relatively mature (which is arguable), the subsidies should be phased out.
Rclix8 on December 4th, 2018 at 06:55 UTC »
Make America 80's again. Great times. Climate not invented yet. Had my hair. Looked good. China were poor and all so perfekt
comisohigh on December 4th, 2018 at 01:47 UTC »
Reality: The companies already know that the end is nigh
Electric car buyers currently get tax credits of $7,500 per vehicle. But that phases out as each company sells 200,000 cars — a level that a handful of companies, including General Motors, are approaching.
Utilities also get tax credits for producing wind power and for installing solar power equipment. Those incentives, enacted before former President Obama took office, are on track to phase out in the coming years.
https://thehill.com/homenews/administration/419507-us-to-end-subsidies-for-electric-cars-renewables-white-house