FREMONT (CBS SF / CNN) — Sales of electric cars from Bay Area-based Tesla, along with General Motors, could get a boost if a bill introduced this week by a bipartisan group of lawmakers to expand the electric car tax credit passes Congress.
Michigan Democrats Sen. Debbie Stabenow, Sen. Gary Peters and Rep. Dan Kildee joined with Tennessee Republican Sen. Lamar Alexander and Maine Republican Sen. Susan Collins to propose the legislation, which they say would increase production in electric vehicles and create jobs.
Currently, customers who buy electric cars receive a $7,500 tax credit. But it phases out after an automaker sells 200,000 vehicles.
Tesla was first to hit the cap last year, and responded by cutting the price of its cars by $2,000. GM exceeded 200,000 vehicles sold earlier this year, and has warned that sales of their plug-in cars, like the Chevrolet Bolt and Volt, could drop as the tax credit phases out.
The proposed legislation would raise the cap, so that another 400,000 vehicles sold by each manufacturer will be eligible for a $7,000 tax credit. It would start phasing out after 600,000 vehicles are sold.
“At a time when climate change is having a real effect on Michigan, today’s legislation is something we can do now to reduce emissions and combat carbon pollution,” Stabenow said in a statement.
“Our bill will help create American jobs and cement Michigan’s status as an advanced manufacturing hub,” she added.
Alexander applauded how far the electric car industry has come over the past decade.
“Investing in American research and technology for better electric vehicles is one way to help our country and the world deal with climate change,” he said.
The proposal could get pushback from the Trump administration. White House economic adviser Larry Kudlow said in December that the president wants to end the electric vehicle tax credit, the Wall Street Journal reported.
“As a matter of our policy, we want to end all those subsidies,” Kudlow said.
The comment came days after Trump threatened to end subsidies for GM, in response to the automaker’s announcement that it would but cutting thousands of jobs.
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