March 19, 2019
Tech

Electric vehicle demand likely to drop if tax credit ends: U.S. official

HOUSTON (Reuters) – Electric vehicle demand is likely to drop if the United States eliminates a tax credit worth up to $7,500 as President Donald Trump has proposed, a senior U.S. Transportation Department official said on Tuesday.

The White House said on Monday that nixing the credit, which phases out after companies hit 200,000 vehicles sold, could save taxpayers $2.5 billion over the next decade. Automakers have pushed for the credit to be extended.

“As you take away some of these incentives, demand will likely come down a bit,” Derek Kan, the Transportation Department’s under secretary of transportation for policy and a former Lyft Inc executive, said at the CERAWeek energy conference in Houston. “When you take away a tax credit, we know from basic economics demand will likely fall because the price is a little high.”

(Reporting by Ernest Scheyder; Editing by David Gregorio)

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