Top car manufacturer CEOs are urging Congress to lift the federal government’s cap on the number of vehicles that are eligible for a tax credit of up to $7,500, according to a joint letter sent on Monday first seen by Reuters.
“Eliminating the cap will incentivize consumer adoption of future electrified options,” the letter states. “Recent economic pressures and supply chain constraints are increasing the cost of manufacturing electrified vehicles which, in turn, puts pressure on the price to consumers.”
In the letter, GM’s Mary Barra, Ford’s Jim Farley, Stellantis’ Carlos Tavares and Toyota’s North America Tetsuo Ogawa say they have pledged to invest over $170 billion through 2030 to bolster electric vehicles’ development, production and sale.
The CEOs say the credit, which begins phasing out once a company sells 200,000 plug-in electric vehicles, is essential to keep vehicles affordable as production and commodity costs rise. Both GM and Tesla have already hit the cap and are no longer eligible for the consumer tax credits.
Last year, Democrats in Congress and President Joe Biden proposed boosting EV tax credits to up to $12,500, including a $4,500 incentive for union-made, U.S. assembled vehicles.
The letter was addressed to Senate Majority Leader Chuck Schumer, Senate Minority Leader Mitch McConnell, House Majority Leader Kevin McCarthy and House Minority Leader Nancy Pelosi.