Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The US Senate has passed an amendment to cap the price of electric vehicles (EVs) that qualify for the $7,500 tax credit for buyers.


The resolution introduced in the Senate by Sen. Deb Fischer caps the price of these EVs at $40,000 and aims to make the federal tax credit available only for those families whose income is lower than $100,000 per year. Fischer said that the cap on income, as well as EVs, was to exclude wealthy Americans from claiming a tax credit for vehicles that they could afford.


The amendment, which still needs to be passed by the House of Representatives, follows a reform program for EVs announced by the Biden administration in early August. 


Under the recently announced initiative, the Biden administration plans to increase the federal tax break on EVs to $12,500 and the price of cars at $80,000, while removing the tax break limit on the first 200,000 EVs sold by car companies. If passed, the initiative will give back tax breaks to carmakers like Tesla, who have now crossed the current threshold for sales, according to media reports.

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