Democrats Signal Defeat on EV Tax Credit
The federal spending bill being negotiated by House and Senate leaders is not likely to include an extension of the $7,500 tax credit for buyers of electric vehicles.

Sen. Debbie Stabenow (D-Mich.) told Bloomberg the federal electric vehicle tax credit would be difficult to extend in the face of “extreme resistance” from the Trump administration.
Photo courtesy Sen. Debbie Stabenow via Flickr
WASHINGTON — An Obama era tax credit for buyers and lessees of new electric vehicles will not likely be extended as part of a new federal spending bill, Reuters reports. A campaign led by manufacturers and Democratic legislators failed to sway Republican leaders, including President Donald Trump, who have denounced the credit as a tax break for wealthy car buyers.
“There has been extreme resistance from the president. It’s going to be difficult,” Sen. Debbie Stabenow (D-Mich.) told Bloomberg this week.
Read: Trump Budget Kills EV Tax Credit
The $7,500 income tax deduction was introduced in 2009 and applied to the first 200,000 electric units built by any manufacturer in the U.S. market. The nation’s EV leaders, General Motors and Tesla, exceeded that mark in 2018 but have since benefited from credits of diminishing amounts. The current federal tax credit of $1,875 for GM and Tesla units will expire Dec. 31 and March 1, respectively.
Opponents of the extension frequently referenced a 2014 IRS report that found 79% of electric vehicle tax credits went to households earning $100,000 or more. Only 1% were claimed by households earning less than $50,000.
Proponents countered the IRS figures set aside the fact that dealers were able to apply the credit to leases, which accounted for a majority of the EV market as recently as 2017, according to Bloomberg Intelligence.
“The tax credit quickly became another example of the government’s solicitousness for those who are comfortable and who are skillful in defense of their comforts.”
Columnist George Will summarized the conservative viewpoint in an April column for The Washington Post.
“The tax credit quickly became another example of the government’s solicitousness for those who are comfortable and who are skillful in defense of their comforts,” he wrote. “Today, demand for electric cars is still insufficient to produce manufacturing economies of scale (after a decade of production, moral exhortations and subsidies, electric cars are a fraction of 1% of all vehicle sales), and batteries are expensive.”
More Dealer Ops

Ladies and Gentlemen, This Is a Dealership: Why the Fundamentals Still Decide Who Wins
A teaching moment by a legendary football coach happens to apply perfectly in the auto retail space. Learn what it is and how to use it to your store’s advantage.
Read More →
Timing the Market Can Hurt Long-Term Program Performance
For dealer-owned reinsurance entities, avoiding volatility entirely can mean falling behind inflation and missing market rebounds that drive long term surplus growth. Missing just a handful of strong market days can materially impact cumulative returns—an important reminder for long horizon trust and investment strategies.
Read More →
Dealer Ads and the FTC
The agency has made it clear in recent enforcement actions and warnings, in auto retail and other industries, that advertised prices must include all nonoptional costs to the consumer.
Read More →
Used Autos Supply Dwindles
The March shopping surge, despite high prices, cut into inventory by the most since the thick of the pandemic, Cox Automotive analysts calculated.
Read More →
Managing Risk Effectively Through Changing Times
The variables influencing risk pricing have changed significantly over the past five years. Being proactive and responsive to emerging trends is not optional but essential.
Read More →
Survey Reveals What Won't Fix What's Breaking Car Sales
AutoPayPlus says extra-long auto loans are trapping consumers and threatening the dealer trade-in cycle, and that the industry is leveraging the wrong tools to combat high MSRPs.
Read More →
IA American Appoints Two Execs
Senior vice presidents of the company's agent and dealer channels chosen to support general agents and help auto dealers with sales and performance.
Read More →
Cox Automotive Acquires Inspection Firm
Full ownership of Alliance Inspection Management, or AiM, meant to unlock growth for Manheim inspection capabilities
Read More →
Assurant Expands Partnership With Holman
Extended collaboration delivers training, products and performance development to 30 newly acquired Holman dealerships
Read More →
Franchises, Throughput Down in First Half
A handful of states see franchise growth through June, while EV sales per store boost overall business in U.S.
Read More →