General Motors sheds thousands of jobs as it moves to focus on autonomous, electric and utes
The Trump administration wants to end subsidies for electric cars and other items, including renewable energy sources.
- Subsidy covers 200,000 vehicles per manufacturer
- Trump threatened to eliminate subsidies for GM after they announced factory closures, job losses
- Democrats unlikely to agree to end subsidies when they take control of House
White House economic adviser Larry Kudlow said he expected subsidies of $US2,500–$US7,500 for buying electric cars would end in 2020 or 2021.
The proposed end to the federal tax credit comes after General Motors Co said it would be closing US plants and cutting thousands of staff.
Following that announcement last week, US President Donald Trump threatened to eliminate subsidies for GM in retaliation for the company’s decision.
It’s not just cars in the crosshairs.
Mr Kudlow said the Trump administration sees an end to other subsidies, including on “renewables”.
“As a matter of our policy, we want to end all of those subsidies,” Mr Kudlow said.
“And by the way, other subsidies that were imposed during the Obama administration, we are ending, whether it’s for renewables and so forth.
“It’s just all going to end in the near future. I don’t know whether it will end in 2020 or 2021.”
The tax credits are capped by Congress at 200,000 vehicles per manufacturer, after which the subsidy phases out.
GM has said it expects to hit the threshold by the end of 2018, which means under the current law, its tax credit scheme will end in 2020.
Tesla Inc said it had hit the threshold in July, while other car manufacturers may not reach their limit for years.
Experts said the White House could not change the cap unilaterally and Mr Kudlow made clear any changes in subsidies would not just affect GM.
“I think legally you just can’t,” he said.
Democrats will take control of the US House in January and are unlikely to agree to end subsidies for electric cars, and many have been pushing for additional incentives.
Tesla and GM have lobbied Congress for months to lift the cap on electric vehicles or make other changes, but face an uphill battle to make changes before the current Congress expires.
In October, Senator Dean Heller proposed lifting the current cap on electric vehicles eligible for tax credits but phase out the credit for the entire industry in 2022.
Two other senators in September proposed lifting the per-manufacturer credit and extending the benefit for 10 years.
Also in October, senator John Barrasso — a Republican who chairs the Senate Environment and Public Works Committee — proposed legislation to end the tax credit entirely.