Tesla, GM and Nissan lobby together to lift the cap on EV tax credits

Tesla has already reached the cap on the $7,500 tax credit

Tesla is joining rivals General Motors and Nissan in a new coalition that has launched in Washington, D.C. to urge Congress to extend federal tax credits meant to encourage sales of electric vehicles.

The EV Drive Coalition says it wants to lift the cap on the number of consumers who can take advantage of the $7,500 electric vehicle tax credit first established by Congress in 2008. Currently, the credits are available only for the first 200,000 electric vehicles sold per manufacturer. The tax credit for that manufacturer is then reduced by half every six months until it disappears.

Tesla has already hit the 200,000-vehicle mark, putting it at a disadvantage as rivals such as Mercedes-Benz, Audi and Jaguar bring EVs to market that can offer consumers the full tax credit. GM is not far behind Tesla and is expected to reach that number later this year or early in 2019, while Bloomberg reports that Nissan was at around 125,000 EVs sold as of September.

"Arbitrary constraints with the federal credit limit consumer options and make it harder for consumers to purchase the cars they want," Joel Levin, executive director of Plug In America, a nonprofit advocacy group and coalition member, said in a statement. "Lifting the cap would create a more level playing field for all manufacturers, giving consumers the freedom to decide which car they want in a free and fair market. Increased competition spurs more American innovation and technology."

Coalition members say electric vehicles are responsible for nearly 300,000 jobs and help make America more energy independent and less reliant on foreign oil, while also creating no tailpipe emissions and lowering pollution levels. The lobbying group says it wants to lift the per-EV manufacturer cap in the current tax credit so that future caps "neither penalize market leaders nor shut out later arrivals to the EV market." They would also allow the tax credit to phase out once electric vehicles become more established.

Bloomberg reports that Congress is expected to push to extend expiring EV tax credits during the lame-duck session, with legislation modifying the cap introduced in both chambers. Some Republicans are opposed to the credits, though outgoing GOP Sen. Dean Heller of Nevada, where Tesla operates its Gigafactory battery plant, has introduced legislation to remove the cap on EV tax credits but phase them out entirely by 2022.

GM last month urged the federal government to mandate that a certain percentage of each automaker's nationwide sales be made up of zero-emissions electric or hydrogen fuel cell vehicles, modeled after a similar mandate in California.

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