On February 12, U.S. Senate Republicans introduced two bills intended to cancel the country’s $7,500 tax credit for electric vehicles and impose a new tax of $1,000 on electric vehicles to cover road repair costs, Reuters reported. .
Senator John Barrasso, along with 14 other senators including Senate Majority Leader John Thune, has introduced a bill to repeal the $7,500 new electric vehicle tax credit and cancel the $4,000 used electric vehicle credit and a federal investment tax credit for electric vehicle charging stations and ends the credit for leased electric vehicles. If the bill is signed into law, the tax credit policy will end within 30 days.
Automakers in Detroit have invested billions of dollars in electric vehicles and battery production, so they have been working to keep these tax credits, or at least phase out.
Another bill proposed by the U.S. Senator is that new electric vehicles will be charged a one-time fee of $1,000. Senator Deb Fischer said that this is roughly the 10-year federal gasoline tax paid by traditional vehicles for road funds. Fischer is the main sponsor of the bill, and other sponsors include Senators Pete Ricketts and Cynthia Lummis.
“Electric vehicles can weigh up to three times as much as fuel vehicles, causing greater wear on our roads and bridges. Traditional gasoline car users typically pay $87 to $100 a year to trust funds,” Fischer said.
Most of the fees for road repairs in the United States come from diesel and gasoline taxes, which are not currently required for electric vehicles. Last month, U.S. Transportation Secretary Sean Duffy said last month that electric vehicles should pay for road use, but “how to do that is more challenging.” So far, some states in the United States have charged electric vehicles to make up for road maintenance costs.
For the past three decades, Congress has decided not to raise fuel taxes to cover rising road repair costs. Since 2008, more than $275 billion (including $118 billion provided by the Infrastructure Act 2021) of the general fund has been used to cover road repair costs.