Toyota Joins Forces with Other Car Makers to Urge Congress to Raise the EV Tax Credit Cap
With Toyota’s EV tax credit expected to expire this year, they take the unprecedented move to join other automakers in an appeal to Congress.
In an unprecedented move this week, Toyota North America CEO Tetsuo Ogawa joined with GM, Ford, and Stellantis urging Congress to raise the cap on the EV tax credit. Currently set to $7,500 the tax credit expires once a manufacturer sells more than 200,000 zero-emission vehicles. GM and Tesla already exceeded that cap and both Toyota and Ford expect to do so by the end of this year.
In a letter obtained by Reuters, the CEOs of each company asked for the cap to be extended “with a sunset date set for a time when the EV market is more mature.” They further argued that while they have pledged to invest over $170 billion to bolster EV development, “recent economic pressures and supply chain constraints are increasing the cost of manufacturing.”
Last year, congressional Democrats proposed boosting the EV tax credit to $12,500. This incentive would include $4,500 for union-made vehicles assembled in the United States. Toyota flatly rejected this measure as unfair due to their non-union workforce. And Senator Joe Manchin, the Democratic senator from West Virginia questioned the need to extend EV tax credits at all.
“There’s a waiting list for EVs right now with the fuel price at $4. But they still want us to throw $5,000 or $7,000 or $12,000 credit to buy electric vehicles. It makes no sense to me whatsoever,” Manchin said. “When we can’t produce enough product for the people that want it and we’re still going to pay them to take it — it’s absolutely ludicrous in my mind.”
Impacts to Lexus
For Lexus, the EV tax credit expiration would immediately impact sales of the NX plug-in hybrid. Additionally, it would also affect the launch of the Lexus RZ as well as future electric models. Without an EV tax credit in place, Toyota faces a perfect storm. Rising prices due to the economic pressures coupled with the loss of the EV tax credit would seriously impact sales. This impact would come at a time Lexus is betting big on an electric future. Every new model includes a plug-in hybrid or EV model with the goal of eliminating all internal combustion engines by 2030. And the move to join other automakers in petitioning an extension of the EV tax credit underscores what’s at stake.
In the below video from his YouTube channel, Kirk Kreifels breaks things down on the EV tax credit. Referencing an Automotive News story, he covers why Toyota joined with the other auto manufacturers and summarizes the impacts. Kreifels also lists out options for a revised tax credit as well as a reasonable extension to support automakers as they transition away from ICE-powered vehicles.
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