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Tesla Model S
Credit: Tesla, Inc.

July 31, 2021 - Washington - Senator Dianne Feinstein and Congressman Jimmy Gomez (both D-Calif.) have introduced the Affordable EVs for Working Families Act, a bill to provide buyers of preowned electric cars with tax rebates up to $2,500.

Buyers of new electric vehicles currently qualify for a $7,500 tax credit, however there is no tax incentive to purchase used electric cars. The tax credit for new electric cars was adopted to incentivize greater adoption of EVs with the goal of reducing greenhouse gas emissions from transportation; a corresponding tax credit for used electric cars would further accelerate the purchase of these automobiles.

The Senate bill is cosponsored by Senator Alex Padilla (D-Calif.). The House bill is cosponsored by Representatives Jimmy Panetta (D-Calif.), Linda Sanchez (D-Calif.), Don Beyer (D-Va.), Earl Blumenauer (D-Ore.), Suzan DelBene (D-Wash.), Dwight Evans (D-Pa.), Gwen Moore (D-Wis.) and Thomas Suozzi (D-N.Y.).

“We know that passenger vehicles account for a huge amount of the carbon emissions that contribute to global warming. California has already taken the lead in shifting away from fossil fuels and the internal combustion engine; now it’s time for the nation to follow,” Senator Feinstein said. “This bill would help make electric cars affordable to a larger group of people and move us closer to a point where high-pollution gas-powered cars are off the roads. We need more legislation like this to incentivize behavior that will reduce global warming, and I’m proud to sponsor this bill.”

“More electric vehicles on Los Angeles roads means fewer CO2 emissions in our skies and better health outcomes for our communities,” said Congressman Jimmy Gomez, who introduced the bill in the House of Representatives earlier today. “With an electric car in the driveway, working families will be able to save money on gas and maintenance costs while prioritizing the safety and security of our planet. Through my bill, the Affordable EVs for Working Families Act, we have a historic opportunity to establish a first-of-its-kind tax credit for buyers of used plug-in electric cars to make them more affordable and expand access to millions of Americans.”

“California has been a leader in pushing for zero-emission vehicles and we must continue to build on that effort here in Congress. By providing a federal tax credit for the purchase of used electric vehicles, we can support our working families by ensuring equitable access to these vehicles while protecting our planet,” said Senator Padilla.

The tax credit would only apply to electric cars at least two years old that cost less than $25,000, and the credit would be phased down for buyers whose adjusted gross income exceeds $75,000 for individuals and $150,000 for joint filers. 

Background:

The transportation sector makes up nearly one-third of total U.S. greenhouse gas emissions. While electric vehicles have a higher upfront cost than gas-powered vehicles, the total cost of ownership is cheaper over the life of the vehicle because of the cost of gas and maintenance (electric vehicles have fewer parts).

This bill would assist low- and middle income households to purchase electric vehicles, ultimately save money and reduce emissions. Similar rebate programs already exist in California, Oregon, Connecticut and Pennsylvania.
Source: Senator Dianne Feinstein