EVs are now considered more fuel-efficient than traditional cars.
The Senate passed a bill Monday that would reduce the $3,000 gas tax credit for electric vehicles to $1,500 for buyers of a $27,000 or more car.
That would save the average consumer about $1 per month on their gas bill.
The tax credit is currently $1.75 per gallon.
If it passes, the Senate would also end a deduction for vehicle owners with electric cars and retroactively extend the credit to electric vehicles purchased in 2017 and earlier.
“This is a step forward in the fight against climate change, and we applaud the Senate for passing this bill,” said Rep. Dave Reichert, R-Wash.
“It will give more consumers the opportunity to buy EVs while still saving money and helping our nation combat climate change.”
The bill also would allow states to use a formula to calculate tax credits for electric cars.
That formula would be based on the number of EVs sold in each state and would be applied to electric vehicle owners in the states.
It would be phased in over a decade, with an initial tax credit in 2019, then phased out for the first two years after the bill’s passage.
But Reichart noted the bill is not perfect.
It also includes a new deduction for fuel-efficiency standards, which the Senate passed last month.
The deduction would reduce federal tax revenue by $10 billion over the next decade, but Republicans said they would offset the revenue loss by eliminating the deduction for tax credits that were built into the bill.
Republicans have also proposed repealing the deduction in the tax code for businesses.
They argue that such a change would raise revenues, but many economists say it would not.
Rep. Tim Murphy, R and former chairman of the House Ways and Means Committee, called the bill a “major step in the right direction.”
Murphy also introduced a bill to allow electric vehicle charging stations in cities.
It has already passed the House but is in the Senate, where it faces strong opposition from some Democrats.
“Electric vehicle owners should be able to get their energy needs met, and that includes charging their vehicles,” Murphy said.
“Charging stations will allow them to charge and refuel their vehicles at the same time.
The bill is currently being reviewed by the Senate Finance Committee and we will report back with an assessment of its impact on electric vehicle sales.” “
The Senate has also passed a measure that allows states to allow charging stations for all vehicles.
The bill is currently being reviewed by the Senate Finance Committee and we will report back with an assessment of its impact on electric vehicle sales.”
The Senate bill also repeals the individual mandate for individuals to buy insurance.
It will also repeal the mandate for small businesses to offer insurance to their workers.
Rep, Dave Camp, R, introduced a companion bill in the House that would expand the tax credit to help small businesses.
He also proposed expanding the deduction from the 10 percent rate to 25 percent for businesses with more than 500 employees.
The House bill also removes a $300 tax credit on medical expenses for electric vehicle users.
The House bill passed with the support of the Republican-led Senate and will now move on to the House.