Legislation recently re-introduced in the U.S. Senate would prohibit the automobile industry from double-dipping on federal subsidies, electric vehicle (EV) tax credits, grants, and EV manufacturing loans.
The Ending Duplicative Subsidies for Electric Vehicles Act would require the industry either to receive manufacturing loans or grants to lower the cost of EV production or have the vehicles they manufacture remain eligible for the EV credits under the Inflation Reduction Act (IRA).
The IRA extends the consumer tax credit of up to $7,500 for new EVs. It also provides the Department of Energy Loan Programs Office with $40 billion in loan authority to make loan guarantees for the manufacturing of fuel-efficient vehicles or the manufacturing of parts for fuel-efficient vehicles. In addition, the act directly subsidizes auto manufacturing through grants and loans.
“American automakers have been on the receiving end of historic amounts of taxpayer money, yet we saw them raise vehicle prices right as they prepared to receive even more government support,” U.S. Sen. John Thune (R-SD), who re-introduced the bill, said. “This common-sense bill would make automakers choose between grants and loans that subsidize their manufacturing operations or having the vehicles, they make remain eligible for the expanded electric vehicle tax credit.”