Many potential buyers for electric vehicles rely on a $7,500 federal tax credit to help offset the higher cost associated with ditching a gas-powered car.
Late last week, as part of the massive GOP tax-reform bill, legislation was introduced that would terminate the federal tax credit. Instead of the EV credit phasing out gradually over the next few years, it would end December 31, 2017.
Regardless of whether the legislation is approved, it's already having a ripple effect on the EV market, as buyers scramble to make sure they can take advantage of the federal tax credit in case it goes away.
Reporter Ryan Beene covered the proposed legislation for Bloomberg. He spoke with Take Two's A Martinez about what cutting the tax credit would do to California's electric vehicle market, and how it might impact the state's environmental goals.
"Most analysts expect the overall sales rate for electric cars in the absence of this tax credit to be pretty significantly impacted," Beene said. "Right now, electric cars are much more expensive than their gasoline counterparts, and especially electric vehicles that are more affordable like the Chevrolet Bolt or the Nissan Leaf– they count on those tax credits to help the vehicle make financial sense."
If the legislation passes and it does indeed take a toll on the EV market, that could mean less alternative fuel vehicles on the road. And that could prove problematic for California's plan to lower the number of gas-powered cars on the road. "Transportation accounts for a huge portion of the state's greenhouse gas emissions," Beene said. "Electrification has been identified by Governor Jerry Brown and California Air Resources Board's Mary Nichols as a key part of that plan."
To hear the full interview, click on the media player above.