By David Shepardson
WASHINGTON (Reuters) -Republicans in the U.S. House of Representatives on Monday proposed killing the electric vehicle tax credit and repealing fuel efficiency rules designed to prod automakers into building more zero-emission vehicles as part of a broad-based tax reform bill.
The proposal, which is set for a House Ways and Means Committee hearing on Tuesday, would repeal a $7,500 new-vehicle tax credit and a $4,000 used-vehicle credit on Dec. 31, although it would maintain the new-vehicle credit for an additional year for automakers that have not yet sold 200,000 EVs.
The president of the Electric Drive Transportation Association, Genevieve Cullen, criticized the proposal, saying that plans "to abandon U.S. leadership in energy innovation by gutting federal investment in electrification are catastrophically short-sighted."
The proposal, she said, would deliver "an enormous market advantage" to competitors like China and threaten U.S. manufacturing and jobs.
The U.S. Treasury in 2024 awarded more than $2 billion in point-of-sale rebates for EVs.
The proposal leaves in place a key battery production tax credit for automakers and battery makers, but a new provision would bar the credit for vehicles produced with components made by some Chinese companies or under a license agreement with Chinese firms.
The provision, which would take effect in 2027, could bar credits for cars powered by Chinese battery technology licensed by American companies such as Ford Motor or Tesla.
House Republicans also propose to kill a loan program that supports the manufacture of certain advanced technology vehicles. It would rescind any unobligated funding and rescind corporate average fuel economy standards and greenhouse gas emission rules for 2027 and beyond. That portion will be taken up by the Energy and Commerce Committee.
Among outstanding loans finalized in President Joe Biden's last weeks in office are $9.63 billion to a joint venture of Ford Motor and South Korean battery maker SK On for construction of three battery manufacturing plants in Tennessee and Kentucky; $7.54 billion to a joint venture of Chrysler-parent Stellantis and Samsung SDI for two EV lithium-ion battery plants in Indiana; and $6.57 billion to Rivian for a plant in Georgia to begin building smaller, less expensive EVs in 2028.
(Reporting by David Shepardson; Editing by Leslie Adler)