The Trump administration has plan to cut the $7,500 federal tax credit that has supported sales of battery-electric vehicles as part of its 2020 budget proposal, reports Reuters.
The White house said cutting the tax credit, which was first implemented in 2008 and 2009, would save the U.S. government $2.5 billion over a decade, according to Reuters.
A bill to terminate the federal tax credit was introduced in October 2018 by U.S. Sen. John Barrasso (R-Wyo.).
The availability of the credit is capped at the first 200,000 qualifying vehicles sold by each manufacturer. General Motors reached the cap when sales of its plug-in electrics vehicles reached the limit in December 2018, which was the second automaker to reach the limit after Tesla in July 2018.
The credit consumers receive for purchasing a Tesla fell to $3,750 at the start of 2019; the credit for GM EVs will drop to the same amount on April 1, reports Reuters.
The EV tax credit was also previously threatened as part of a proposed tax cut from House Republicans in 2017, but was retained as part of a compromise package.
Electric vehicle sales collapsed in Georgia after the state eliminated its $5,000 state credit in June of 2015, reports Bloomberg. Fewer than 100 electrified cars were sold per month after the incentive was no longer offered, compared with 1,400 per month before the move.