Right now there are two different legislative efforts to change the federal tax credit for electric cars. On the one hand, you have a Republican senator who introduced a new bill to end the $7,500 federal tax credit and instead, tax them even more. On the other hand, another Republican senator proposed a new bill to remove the tax credit cap and expand it to 2022. This has all come at the same time as Tesla hit the 200,000 delivery threshold to initiate the phase-out.
With those two bills and the Democrats regaining control of the House, while the Republicans expand their majority in the Senate, it is increasingly unclear what is going to happen with the EV federal tax credit. However a new coalition launched by several automakers, including Tesla, GM and Nissan is aiming to “reform and recharge” the electric vehicle tax credit.
According to the EV Drive Coalition:
“The original electric vehicle tax credit, which goes directly to consumers not manufacturers, catalyzed the market, increased consumers awareness and grew a nascent industry. To promote continued market growth and stabilization, members of the EV Drive Coalition are advocating for reform to lift the current cap on the number of consumers who can take advantage of the credit through each manufacturer.”
This comes at the same time as Tesla’s shares dropping by about 5% in value on Monday and Volkswagen head, Herbert Diess boasting this week that they will be building 50 million EVs in the coming years and that some of them will cost just half as much as Teslas. According to Diess, they already have enough batteries available to power all 50 million of them.
Making profit out of electric cars in the current global market is no easy feat, however Kia expects to break even on EV’s in Europe within 2-3 years. Europe is finally making larger strides in the EV market in hopes of getting in on the action of leading states like California. Germany for example has just 54 thousand electric cars on the road and while that’s not many, it’s 20 thousand more than a year ago.
Similarly EV’s are on the rise in Australia too. According to Allianz Australia:
“We’ve had more customer enquiries about insurance for electric vehicles in the first six months of this year, than we did for the whole of 2017.”
While Tesla’s shares might have dropped recently, the future looks bright for the company with 45% of current electric car drivers planning to buy a Tesla next according to CleanTechnica. According to the report 87% of North American Tesla drivers plan to buy another Tesla, while the figure in Europe was at 83%. The majority of the respondents, both in North America and Europe opted for the Tesla Model 3.
Not only is this good news for Tesla, but the evolution of the EV market across the world and the creation of the EV Drive Coalition only spells good things for the electric car market heading into 2019.