Automakers Vow to Spend $250 Billion on U.S. Electric Vehicles

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Automakers and parts suppliers are prepared to spend $250 billion on boosting the use of electric vehicles in the U.S., and called on the Biden administration to urge Congress to extend tax credits to buyers.

The funding is intended to spur adoption of alternative-fuel cars like plug-in hybrid vehicles, battery-powered EVs and fuel-cell EVs, the Alliance for Automotive Innovation, United Auto Workers International Union and Motor & Equipment Manufacturers Association said in a letter to President Joe Biden released Tuesday.

“We stand ready to work with your administration to define the bold, comprehensive vision and innovation that will place the U.S. at the forefront of creating a cleaner future for motor vehicle transportation,” the groups said in the letter. “This transformation is greater than any one policy, branch or level of government, or industry sector. It will require a sustained holistic approach with a broad range of legislative and regulatory policies rooted in economic, social, environmental, and cultural realities.”

The groups said Biden should press Congress to approve an extension of a federal tax credit that provides as much as $7,500 to buyers of electric vehicles. Automakers currently face a lifetime ceiling of 200,000 electric vehicles per manufacturer that qualify for the tax break. Reaching the maximum number of tax credits begins a phasing-out of the offering, with the amount falling by half every six months until it hits zero.

General Motors Co. and Tesla Inc. became the first carmakers to hit that ceiling in 2018.

The groups represent both domestic and foreign companies, and include such automakers as GM, Ford Motor Co., Honda Motor Co. and Toyota Motor Corp.

©2021 Bloomberg L.P.

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