The Drive American Act would eliminate existing federal tax credits for electric vehicles and establish a new tax credit for gasoline and diesel vehicles manufactured in the United States. Specifically, it repeals three current EV tax credits: the $7,500 clean vehicle credit for new electric cars, the credit for previously-owned clean vehicles, and the credit for qualified commercial clean vehicles, with these repeals effective for vehicles placed in service after December 31, 2022. In their place, the bill creates a new "America First Vehicle Credit" worth up to $7,500 per vehicle ($2,500 base plus up to $5,000 based on payload or seating capacity) for new gasoline and diesel vehicles with final assembly in the United States. To qualify, vehicles must meet domestic content requirements of at least 60 percent regional value and 25 percent labor value content, be produced at facilities paying workers $35-$44 per hour, and have a manufacturer's suggested retail price not exceeding $55,000 to $80,000 depending on vehicle type. The credit is limited to individual taxpayers earning below certain income thresholds ($150,000 to $300,000 depending on filing status) and expires after December 31, 2033.
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