Survival of the Electric Car Tax Credit
Section 30D of the Internal Revenue Code (the “Code”) provides a tax credit of $2,500 to $7,500 per plug-in electric drive motor vehicle depending on the size of the battery. The tax credit generally may be applied by the individual purchasing or leasing the vehicle for personal use within the United States.
The House of Representatives passed a version of the new tax legislation, known as the Tax Cuts and Jobs Act, which repealed the credit.  The Senate, however, did not include such provision and the repeal of the tax credit was not adopted—letting the credit stand for the time being. 
However, that doesn’t mean the tax credit is safe. The current legislation provides for a phase-out of the tax credit based on a 200,000 vehicle-per-manufacturer limitation beginning in 2009. That means, for example, shortly after Ford reaches 200,000 sales of qualified vehicles since 2009, the tax credit for future purchases of Ford plug-in electric drive motor vehicles will be phased out over a one-year period, with 50% of the tax credit being allowed for vehicles acquired in the first two quarters of the phase-out period and 25% of the tax credit being allowed for vehicles acquired in the last two quarters of the phase-out period.
Data reporting how many qualifying vehicles have been sold by quarter are available from the IRS.  Although sales of qualifying vehicles declined in 2017, many commentators are calling 2018 the “Year of the Electric Car” and are forecasting higher sales. While it is not likely that any manufacturer will reach the 200,000 vehicle limitation this year, it is possible. It is also possible that the electric car tax credit comes under fire in the next round of tax code revisions which targeted, in some cases, other environmentally friendly tax incentives, such as the exclusion for employer-provided bicycle commuter fringe benefits (a relatively minor benefit of only $20 per month for bicycle commuters, which was repealed until 2026).
Taxpayers in jurisdictions with high property values should pay close attention to tax credits, including the tax credit for plug-in electric vehicles. As deductions for state and local taxes are capped, taxpayers may find themselves looking to use tax credits to reduce their overall tax liability. The tax credit would allow the taxpayer to reduce his or her overall tax liability, even if he or she takes advantage of the standard deduction rather than itemizing. Of course, taxpayers should consult their tax planners regarding whether such credit could be useful to him or her.
 Sec. 1102(c) of the House Bill
 See Joint Explanatory Statement of the Committee of Conference, p. 45.
 Joint Explanatory Statement of the Committee of Conference, p. 106; IRC 132(f).