Asked about plans following General Motors Co (GM.N) declared U.S. plant closings and layoffs a week, Kudlow pointed into the 2,500-to-$7,500 tax charge for customers who purchase plug-in electric vehicles, such as those produced with GM, under national law.
“As a matter of the coverage, we would like to finish all those subsidies,” Kudlow stated. “And incidentally, other subsidies which were enforced during the Obama government, we’re finishing, whether it’s to get renewables etc.”
Asked about a deadline, he explained: “It is just going to end in the not too distant future. I really don’t know if it is going to end in 2020 or 2021.”
The tax credits are capped by Congress in 200,000 vehicles each maker, and the subsidy phases out. GM has said it hopes to hit the brink from the end of 2018, so under the present legislation, its own tax credit scheme would end in 2020. Tesla Inc (TSLA.O) said in July it’d struck on the brink. Other automakers might not reach the cap for many decades.
Experts say that the White House can’t alter the cap. U.S. President Donald Trump last week threatened to remove subsidies for GM in retaliation for the organization’s decision.
Kudlow made apparent any modifications in subsidies wouldn’t only affect GM. “I believe legally you simply can’t,” he explained.
Democrats will take charge of the U.S. House in January and therefore are not likely to agree to end subsidies for electric automobiles and most are pushing for further incentives.
Tesla and GM have lobbied Congress for many years to raise the cap on electric vehicles to make other modifications, but face an uphill struggle make modifications prior to the existing Congress expires.
Back in October, Senator Dean Heller suggested raising the current cap on electric vehicles qualified for tax credits but phase out the charge for the whole business in 2022. Two additional senators in September suggested lifting the per maker credit and extending the advantage for a decade.
Also in October, Senator John Barrasso that a Republican who chairs the Senate Environment and Public Works Committee suggested laws to end the EV tax charge entirely.