Electric Vehicles Are The Right Turn for America

The twenty-first century has brought with it great strides in the auto industry, and it is easy to see the proliferation of technology like electric vehicles (EVs) and autonomous vehicles in our day-to-day lives. More parking spaces are reserved for EVs, charging stations are popping up at rest stops and gas stations, and an increasing number of cars on the road boast electric and semi-autonomous capabilities. Today, EVs compose two percent of the auto market and interest in this technology is growing. However, a provision in a 2008 federal consumer tax credit will hinder the growth of this industry to the detriment of consumers, the workforce, and the American economy.

The EV federal tax credit was designed to incentivize a shift from traditional gas-powered vehicles to electric, and reduce our exposure to the fluctuating global fuel markets. It has only done so to a limited extent. Taxpayers purchasing EVs receive a $7,500 tax credit, but there is a catch — the 2008 provision imposes a limit on the number of qualifying vehicles eligible for the tax credit to 200,000 EVs per manufacturer. Unfortunately, this is a limit U.S. manufacturers are getting closer to hitting every day.

While the cap of 200,000 per manufacturer was well intentioned, it now serves as a limiting factor. Buyers will be less likely to choose an American made car for its quality and technology, but will be incentivized to choose a car from a foreign manufacturer who has not yet hit their cap. Furthermore, a recent Bloomberg New Energy Finance analysis projects that the global EV market is likely to grow ten-fold by 2025. To handicap the American auto industry with an arbitrary cap would be to stifle tremendous opportunity for our nation to capitalize on that early investment, and hurt consumers who would otherwise contribute to advancing a new era of transportation in America.

If Congress does not act to lift the per-manufacturer cap, the only other thing that will lift is other countries’ rankings as top EV manufacturers. China is currently the largest EV manufacturing nation, and without reform to the EV tax credit America will undoubtedly be left even further behind. This risks losing not only millions of dollars to economies more competitive in the EV market, but also puts American jobs on the line.

Ultimately, limiting the American EV sector’s growth will only encourage greater dependence on foreign companies, and hurt American companies, American jobs, and our domestic economy. Failure to diversify our fleet also threatens our economic growth and national security, while electric vehicles further America’s energy security and independence. Implications for national security compound the economic costs of an over-dependence on fuel by keeping the U.S. in business with often hostile regimes.

Electric vehicles offer a viable, profitable, and beneficial alternative to power our nation’s transportation. It is important that Congress allow this market to flourish by reforming the current EV tax credit to remove or extend the per manufacturer ceilings. The auto industry is one of the most important in the United States and the U.S. is one of the largest vehicle markets in the world.

Right now, Congress has the power to act. Without action, we keep an unlevel playing field in the EV market. Consumers will have little incentive to purchase an EV from U.S. manufacturers who made the initial investment in EVs. That means that those dollars don’t go toward supporting American families, creating American jobs, or strengthening the American economy. They go elsewhere, to other countries, rewarding those who didn’t step forward to take the risk of being an early adopter. This is a contradiction of the original purpose for which the tax credit was created. It is crucial that legislators support reform to the current electric vehicle tax credit, and spark the nation’s economy.

Roberta Combs is the President and CEO of the Christian Coalition of America.Michelle Combs is the President of the Young Conservatives for Energy Reform.