US may end EV subsidies

The Trump administration wants to end subsidies for electric cars and other things such as renewable energy sources.

That’s according to White House economic adviser Larry Kudlow, Reuters reports.

Kudlow, responding to questions in the wake of General Motors’ announcement it would be mothballing eight US factories and laying off about 14,000 people, says the US$2500 to $7500 tax credit for consumers buying plug-in EVs will go.

“As a matter of our policy, we want to end all of those subsidies,” he says. “And by the way, other subsidies that were imposed during the Obama administration, we are ending, whether it’s for renewables and so forth.”

He expects the EV subsidies will end in 2020 or 2021.

The tax credits are capped by Congress at 200,000 vehicles per manufacturer, after which the subsidy phases out.

GM has indicated it’s likely to reach the threshold by the end of 2018, so its tax credit scheme could end in 2020. Tesla reached it earlier this year, but others may not get there for several years.

President Donald Trump recently threatened to remove EV subsidies for General Motors in retaliation for the company’s US$6 billion cost-cutting decision.

GM announced it is “accelerating transformation” of its global product development which includes doubling resources allocated to electric and autonomous vehicle (AV) programmes in the next two years.

Kudlow says any changes in subsidies won’t be just to GM. “I think legally you just can’t.”

Democrats will take control of the US House in January and are unlikely to agree to end subsidies for electric cars. Indeed, many have been seeking additional incentives.