White House ‘Build Back Better’ Plan Includes EV Tax Credit Increase to $12,500

After U.S. Democrats proposed an electric vehicle (EV) tax credit increase to $12,500 USD last month, it appears the proposal has made it into President Joe Biden’s Build Back Better plan, as congressional Democrats come to an agreement with the White House.

The White House announced the almost $2 million USD social spending plan on Thursday, including the $12,500 USD EV tax credit which applies to union labor-manufactured EVs, according to CNET.

The White House says the bill “can pass both houses of Congress,” and if it does, it will boost EV credits by an additional $5,000 USD – for buyers of most companies.

In an initial promise for the Build Back Better plan, President Biden said, “The framework’s electric vehicle tax credit will lower the cost of an electric vehicle that is made in America with American materials and union labor by $12,500 for a middle-class family.”

Despite boosting the credit for union-made manufacturers, non-union companies like Tesla and other startup EV manufacturers will not be eligible for the boost, subjecting buyers to the current $7,500 USD tax credit.

The bill also includes $555 billion USD dedicated to fighting climate change, though it’s unclear as of yet how that budget will be allocated.

Last month, Tesla head Elon Musk also slammed the proposed tax credit increase for favoring Ford, given that many of its models are made in Mexico.