Congress Passes $ 1.2 Trillion Infrastructure Bill, $ 12,500 Electric Vehicle Tax Credit Still Pending Passage

After a full day (if not months) of deliberation and negotiation, Congress approved a long-debated infrastructure bill totaling $ 1.2 trillion. The 228-206 vote convened by the United States House of Representatives early Saturday morning will put into action a vital part of President Biden’s national legislature. While 6 Democrats did not vote for the bill, 12 Republicans joined

Although this was a huge victory for the Biden administration, Speaker and House Speaker Pelosi were unable to secure a pass vote for the “Build Back Better Act,” which includes a restructured federal tax credit for electric vehicles up to $ 12,500.

From the first day of President Biden’s tenure in the White House, he shared clear intentions to use Democratic majorities in Congress to push through major infrastructure legislation.

This infusion of funds into U.S. infrastructure is focused on improving everything from roads to waterways, and promoting the adoption of electric vehicles nationwide.

One of the first terms of the bill proposed by Biden was a restructuring of the country’s current federal tax credit program for zero-emission vehicles. The current program offers US consumers up to $ 7,500 in federal tax credits for electric vehicle purchases, but limits incentives for automakers to 200,000 units sold.

For this reason, large American manufacturers like Tesla and GM have long passed this threshold, and their customers have not been able to take advantage of the credit.

Since the infrastructure plan was introduced earlier this year, it has faced opposition from conservatives and moderates in Congress and has gone through many iterations.

Earlier this week, we reported that the most recent congressional reform on the bill still included the $ 12,500 electric vehicle tax credit that had been incorporated into the Build Back Better Act to Stay Alive. .

With the latest news from the capital early Saturday morning, a major infrastructure bill was passed, but the “Build Back Better Act” remains in limbo, at least for now.

The current incentive cap for US automakers like Tesla and GM / Source: fueleconomy.gov

The $ 1.2 trillion for infrastructure is a huge step forward

Early this morning Axes shared the news that the House voted to pass a $ 1.2 trillion infrastructure bill proposed by the Biden administration that will be spent over eight years. A far cry from the $ 2.25 trillion in spending initially proposed in March, but a victory nonetheless for the president.

While many exact details of spending have yet to be revealed, the approved $ 1.2 trillion will include $ 550 billion in new spending and include the following:

  • $ 110 billion to rehabilitate roads, bridges and other infrastructure nationwide (America’s infrastructure system earned a C- from the American Society of Civil Engineers earlier this year)
  • $ 7.5 billion for electric vehicles and electric vehicle charging infrastructure
  • $ 2.5 billion in zero emission buses
  • $ 2.5 billion in low-emission buses

What really stands out from this approved bill is the $ 7.5 billion pledged to help establish a nationwide network of electric vehicle charging stations. In addition, an additional $ 65 billion will be invested in the clean and renewable energy package for the U.S. electricity grid, hardening an obsolete system.

Several House progressives voted against the infrastructure bill, calling for simultaneous approval of the “Build Back Better Act”. These representatives include:

  • Representative Jamaal Bowman from New York
  • Rep. Cori Bush from Missouri
  • Representative Alexandria Ocasio-Cortez from New York
  • Rep. Ilhan Omar from Minnesota
  • Representative Ayanna Pressley from Massachusetts
  • Representative Rashida Tlaib from Michigan

However, thirteen Republicans crossed party lines to get the infrastructural part of the package across the finish line. While Build Back Better remains in limbo, it should still see the passage soon, at least in some iterations.

$ 12,500 EV tax credit still in effect, but not yet approved

House Speaker Nancy Pelosi began Friday’s congressional session with plans to vote on the $ 1.75 trillion “Build Back Better Act” and simultaneously on the $ 12,500 federal tax credit for electric vehicles.

However, a small group of moderates in the House refused to support the legislation without a cost estimate from the Congressional Budget Office (CBO). As a result, the House approved a procedural vote required to open Biden’s “Build Back Better Act” for adoption, following a formal ruling. CBO cost estimate.

These opposing moderates all signed an assurance that they would vote in favor of the passage once the score was released. This vote for the global expenditure envelope should take place when Congress resumes after a week of vacation.

It’s not just the moderates who oppose the current terms of the Build Back Better Act. While domestic automakers like Ford have applauded Congress for its work, some foreign automakers with non-union American manufacturers are already publicly denouncing the unfair new electric vehicle tax credit.

Toyota, for example, has already launched an advertisement opposing the pro-union tax credit. Volkswagen is another company denouncing the conditions, calling the additional incentive “fundamentally bogus”.

Although Tesla is an American automaker, it uses non-union labor and, under the proposed terms, would also not be eligible for the additional incentive of $ 4,500. That being said, his unit limit would be dissolved and he could once again qualify for at least a few incentives.

The Build Back Better Act and its potential EV credit of $ 12,500 are still awaiting passage after the CBO score and official congressional approval. Much may change between now and the official signing in the Oval Office, but here are the latest terms introduced earlier this week.

Note – these exact conditions are not confirmed until the bill is officially adopted:

  • Federal Electric Vehicle Tax Credit Rises from $ 7,500 to $ 12,500
    • Keep the $ 7,500 New Electric Car Incentive for 5 Years
    • Add an additional $ 4,500 for electric vehicles assembled in the United States using union labor
    • Additional $ 500 for electric vehicles using batteries with 50% components (including cells) made in the USA
  • Zero emission vans, SUVs and trucks with MSRPs of up to $ 80,000 are eligible (increased from previous policy)
  • Electric sedans priced up to $ 55,000 MSRP are eligible (stay the same)
  • The full EV tax credit will be available for individuals filing adjusted gross income of $ 250,000 or less, $ 500,000 for joint filers (instead of $ 400,000 for individuals / $ 800,000 for joint filers currently. in place)
  • Electric vehicles must be manufactured in the United States from 2027 to be eligible for any of the $ 12,500 credit
  • Eliminates tax credit cap after automakers hit 200,000 electric vehicles sold, making GM and Tesla eligible again

All eyes will be on Congress as it meets again after its week-long recess.

Electrek‘stake:

Obviously, this is a big win for EVs overall, but many Tesla customers (and foreign automakers who build EVs in the United States with a non-union workforce) wonder why such an additional incentive of $ 4,500 should be applied to vehicles manufactured by unions. Joe Biden is obviously a self-proclaimed trade unionist, but it’s clearly a lot of money.

Also, are automakers struggling to sell electric vehicles right now? Obviously, Tesla has up to a year of waiting for its vehicles and it’s not like there is a pile of stock of Chevy Bolts or Ford Mustang Mach-Es.

Ford F-150 Lightnings? Ford recently announced 160,000 orders, which is already its total production by 2025. So ordering one on today’s news would make it available in 2026, after a planned design update.

Hopefully automakers use today’s news to justify increasing plans for electric vehicle production in the United States, which they should have done a long time ago. Ideally, this will also force infrastructure providers to scale up production on a large scale to support the influx of electric vehicles.

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About Michael S. Montanez

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