President Donald Trump has threatened to kill one of the signature efforts of the Obama administration, but today White House economic adviser Larry Kudlow confirmed it: Trump will end subsidies for electric cars.
The move, which Kudlow said would happen in 2020 or 2021, covers other items including renewable energy sources. He revealed he plans in response to a question about what the administration plans to do in response to General Motors’ recently revealed plant closings and employee layoffs.
The president, who is in China, did not offer an official proclamation, nor has he tweeted about it, which is often how he reveals impactful actions he plans to take.
Trump isn’t the first one to the party with the idea. Republican Senator and chairman of the Senate Environment and Public Works Committee John Barrasso introduced a bill to kill off the federal incentives altogether in October.
(Trump claims China will cut auto tariffs. Click Here for the story.)
However, the larger push – including from some Republicans – has been to waive the cap on the $7,500 tax credit.
Republican Senator Dean Heller, offered up legislation in October that would be eliminated the current cap on electric vehicles eligible for tax credits. The idea has been seconded by several automakers, including Tesla, GM and Nissan.
Trump recently revived the possibility in the wake of GM’s restructuring announcement. “The U.S. saved General Motors, and this is the THANKS we get! We are now looking at cutting all @GM subsidies, including … for electric cars,” Trump tweeted.
At the time, it was unclear how Trump would be able cut GM off while allowing the remaining automaker to continue reaping the benefit of the tax credit. Now it would appear that GM and Tesla will be the companies that gained the biggest benefit since they have sold more EVs than their competitors.
(To see more about Trump chiding GM for plant closures, new Congresswoman blaming Trump, Click Here.)
Kudlow told reporters last week that Trump felt like GM “turned their back on him.” Since there is no simple way to single GM out in the elimination of the tax credit, it appears the president will be taking a scorched earth approach to the elimination of the credit.