Legislation increasing U.S. purchase incentives for electric vehicles made it out of a Senate committee. It’s a potential boon for American carmakers, including
and, of course,
But investors seemed to react Thursday with a yawn. They may be overlooking a few key details. President Clean Energy for America Act. The bill made it out of the Senate Committee Wednesday with a critical modification from Sen. Debbie Stabenow (D., Mich.). The Made in America provision continues the $7,500 tax credit for EV purchases through 2026—significantly eliminating a cap affecting General Motors (ticker: GM) and Tesla (TSLA). But an additional $2,500 credit is added for cars assembled in the U.S., and another $2,500 for vehicles built with unionized labor.has proposed several EV incentives since taking office. One of the bills with EV incentives is the
GM, essentially, goes from $0 purchase incentives to $12,500 per vehicle. A new Ford (F) F-150truck suddenly starts at about $27,500 with incentives instead of $40,000. And Tesla gets a $10,000 per-car incentive, more than the $7,500 tax credit it received earlier. Tax credits are actually for car buyers. They reduce taxable income, effectively acting as a rebate for an . Automakers saw the benefits phased out as they sold more EVs, and eventually, the benefits stopped after 200,000 EVs were sold. GM and Tesla are the two automakers that hit the 200,000 threshold.
Getting the bill out of committee is good news. It means there is, although it passed the committee by a vote of 14 to 14. The amount of the credit—$12,500—is higher than expected. The $10,000 figure for Tesla is good news too. Now it has to . was down most of the day. Maybe investors got the message late. It . The
both closed up less than 0.5%.
Ford and GM7.1% and 2.9%, respectively. Both stores also had nonlegislative catalysts: Ford shares were upgraded by RBC analyst Joe Spak. GM announced it was restarting plants as the global eased. That announcement is good news for everyone. GM and Tesla, the two biggest beneficiaries of changing EV credits, weren’t immediately available to comment on the legislative process. Wedbush analyst Dan Ives, however, is feeling bullish about the news. Ives told Barron that the amount of support is larger than he expected, and passage is likely closer than investors expect.