EV Tax Credit Repeal Hurts American Innovation
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by Pasquale Romano
With the House of Representatives having passed its tax reform plans and the Senate having released its version, the uncertainty around the basic existence of the federal EV tax credit, as evidenced by the difference between the two proposals, will be disruptive to the industry. It’s this uncertainty that leads everyone to a fundamental question: If the government chooses to end EV tax credits, will that affect the EV market overall? The answer is yes.
Policies that spur growth in the electric mobility space, like the Section 30D credit for the purchase of plug-in electric vehicles, have and continue to successfully foster American innovation. As a result, today, we are at the point of no return on EV momentum. While we don’t believe the EV technology space will require support forever, pulling the rug from under this effective policy and others like it too soon will negatively impact the future success of electric mobility and technology development in the U.S.
There is a perfect storm brewing, consumer demand is at an all-time high, with EV sales up nearly 40% year over year, the 25th straight month of record sales with consecutive gains month after month.
There is no question that countries around the world are moving quickly to transition to electric mobility. As a result, every major automaker — including BMW, Ford, General Motors, Hyundai, Mercedes Benz, Tesla, Volvo, Volkswagen, and others — have either introduced or committed substantial investments into bringing no fewer than 20 new plug-in models to the U.S. market over the next several years, with many more in development. Most analysts agree that this progress will only intensify in the coming years. This onslaught of new electric drive models will change the transportation landscape. As a wider variety of plug-in models are introduced, giving consumers more choice, and the price of entry continues to drop, making EVs more accessible than ever, the industry will continue its rapid growth trend.
Independent analysts believe that, by 2030, electrified cars will make up more than half of the global auto market and support from governments will help to usher in a cleaner mobility future.
The federal EV tax credit helps American automakers and technology companies compete in global markets and creates an environment for continued innovation and growth. Prematurely removing this policy will hurt American companies and make them less competitive on the global stage.
Some states are taking note, rising to the occasion and welcoming the electrified future. States like Nevada have worked closely with private companies to become a hotbed of electric mobility development, creating thousands of jobs. In other states, like Ohio, state and local governments are exploring opportunities to attract private investment to develop and test advanced transportation technology.
The U.S. has led the electric mobility revolution and continues to be the birthplace of some of the world’s leading clean technology and advanced mobility companies, laying the foundation for the 21st century transportation sector. Federal policies that support this technology leadership have succeeded in helping to create an industry where job creation is rife and innovation is flourishing. Companies such as ChargePoint will continue to uphold this commitment to leading the world in electric mobility and we encourage the Congress to continue to support this growing market.
Advanced mobility has been a source of breakthrough technology but also jobs across many sectors, positively impacting the U.S. economy. The Electric Drive Transportation Association estimates more than 215,000 jobs in clean energy today — a number that is growing in a globally competitive environment.
ChargePoint supports initiatives that protect American innovation leadership, jobs, and inspire continued growth while helping to reduce emissions and increasing the adoption of electric vehicles. Prematurely ending foundational policies that foster transformative technology, have positive impacts on economic growth and job creation, and spur investment in states across the country, will slow this growth, threaten American technology leadership, and hurt the ability of US companies to compete on a global stage.
About the Author: Pasquale Romano is the President and CEO of ChargePoint, the world’s largest and most open EV charging network. A successful serial entrepreneur, he has more than 25 years of technology industry experience. He currently sits on the board of Agilone, CALSTART, and the YMCA of Silicon Valley. Pasquale holds an undergraduate degree in computer science from Harvard University and received his M.S. from MIT.
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