Home Cartoonist Toyota buyers will soon lose US tax credits for electric vehicles | Economic news

Toyota buyers will soon lose US tax credits for electric vehicles | Economic news


DETROIT (AP) — Toyota customers will soon no longer be eligible for U.S. federal tax credits for the purchase of electric or hybrid vehicles.

The automaker expects that before the end of June it will hit a cap of 200,000 vehicles on credits, Bob Carter, head of Toyota’s North American sales, said Wednesday. After that, the credits will be phased out over the next year, reaching zero, as Tesla and General Motors have done before.

The lack of credits is problematic for automakers switching from petroleum vehicles to batteries in a bid to reduce emissions, meet government fuel economy standards and fight climate change. Nissan is about 30,000 vehicles away from hitting the cap, with more to follow as more electric vehicles are introduced.

Tesla, the world’s top seller of electric vehicles, and GM are already at a price disadvantage to other automakers without the credits, and Toyota soon will be. Additional tax credits for electric vehicles are included in President Joe Biden’s Build Back Better spending bill, which is stalled in Congress.

Toyota hit the ceiling largely by selling plug-in gasoline-electric hybrid vehicles. The company’s RAV4 Prime small plug-in SUV with 42 miles of electric range nets the buyer a $7,500 credit, the largest available. The Prius Prime plug-in, with 25 miles of electric range, gets $4,500. Toyota had previously offered an all-electric RAV4, but it didn’t sell well and was cancelled. It’s rolling out an all-electric model called the bZ4X this summer with 250 miles per charge.

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The Build Back Better bill would give electric vehicle buyers a $7,500 tax credit through 2026 to boost sales. But the following year, only electric vehicles made in the United States would be eligible for the credit. And the base credit increases by $4,500 if the vehicle is manufactured in a US plant that operates under a union-negotiated collective bargaining agreement. Only GM, Ford and Stellantis vehicles would qualify.

Carter, in a conference call with reporters, said Toyota had lobbied against the extra credit only for unionized factories, calling it unfair to nonunion workers. “It just has to be a level playing field,” Carter said. “We are not anti-EV credits.”

Democrats backing electric vehicle credits from the United Auto Workers say supporting union jobs is good for the economy and communities because unions have helped build the middle class.

GM CEO Mary Barra said automakers that offer electric vehicles early shouldn’t be at a disadvantage.

Restoring appropriations is “an issue that Congress really needs to address,” Carter said.

Toyota plans to offer 30 fully electric vehicles from its Lexus and Toyota brands by 2030.

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