U.S. senators suggest ending the electric vehicle tax credit. They propose a new $1,000 tax on electric vehicles. This tax will fund road maintenance. The Republican senators introduced two bills on February 12. They aim to eliminate the $7,500 tax credit for electric vehicles.
Senator John Barrasso and 14 other senators, including Senate Majority Leader John Thune, introduced a bill. This bill aims to eliminate the $7,500 tax credit for new electric vehicles. It also seeks to remove the $4,000 credit for used electric vehicles and the federal investment tax credit for electric vehicle charging stations. Additionally, it plans to end the credit for leased electric vehicles. If this bill becomes law, the tax credit policies will end in 30 days. Detroit automakers have invested billions in electric vehicle and battery production. They strive to keep these tax credit policies or at least phase them out gradually.
A new bill from U.S. Senators proposes a one-time fee of $1,000 for new electric vehicles. Senator Deb Fischer, the main sponsor, states this fee roughly equals the federal gas tax paid by traditional vehicles over ten years. Senators Pete Ricketts and Cynthia Lummis also support the bill. Fischer notes that electric vehicles can weigh up to three times more than fuel vehicles, causing greater wear on roads and bridges. Traditional gas vehicle users typically pay between $87 and $100 annually to the trust fund. Most road maintenance costs in the U.S. come from diesel and gas taxes. Electric vehicles currently do not pay these taxes. Last month, U.S. Transportation Secretary Sean Duffy said electric vehicles should pay for road use, but added that “how to do this is more challenging.” Some states already charge electric vehicles to cover road maintenance costs. For the past thirty years, Congress has chosen not to raise fuel taxes to meet rising road repair expenses. Since 2008, over $275 billion from the general fund has gone to road maintenance.