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The nascent market for electric cars will suffer a big setback if the Republican tax plan released on Thursday enters into law.

Among the changes to the current tax code would be an end to the Plug-In Electric Drive Vehicle Credit.

That’s the tax incentive that currently means up to $7,500 back from the IRS when you purchase a new battery or plug-in hybrid electric vehicle.
Personal EV incentives gone
Since the start of 2010, the EV tax credit has been $2,500 for a plug-in vehicle with at least 5kWh battery capacity.

Every extra kWh nets another $417 up to a maximum of $7,500, although you would need at least that amount in income tax liability—the IRS won’t cut you a check to make up the full amount.
It was never meant to be permanent; once an automaker sells 200,000 qualifying vehicles (starting from January 1st, 2010) its eligibility is phased out over a matter of months.
But in the almost-seven years since, no one has reached that limit yet.

Tesla will almost certainly be first, with General Motors not far behind; between them, they’ve sold a lot of Model Ss and Chevrolet Volts.
If this tax plan is enacted, it will surely mean pain for both companies, as well as anyone else hoping to sell a lot of EVs here in the US.

The data is pretty clear—tax incentives sell electric cars, and the market for EVs can dry up very fast when they’re abolished, as Georgia’s recent experience shows.
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