U.S. Sen. John Thune (R-S.D.) recently introduced the Ending Duplicative Subsidies for Electric Vehicles Act, legislation that would prohibit the automobile industry from double-dipping on federal subsidies, specifically electric vehicle (EV) tax credits, grants, and loans for EV manufacturing. The bill would require stakeholders to choose between receiving manufacturing loans or grants to lower the cost of EV production or having the vehicles they manufacture remain eligible for the new EV credits under the so-called “Inflation Reduction Act” (IRA).

“American automakers have been on the receiving end of historic amounts of taxpayer money, yet we see them raising vehicle prices right when they’re preparing to receive even more government support,” said Thune. “My common-sense bill would make automakers choose between grants and loans that subsidize their manufacturing operations or having the vehicles they make remain eligible for the expanded electric vehicle tax credit. Automakers shouldn’t be able to double-dip at taxpayers’ expense.” 

“It’s proven that government subsidies drive up inflation and do more harm than good to the industries they are supposed to benefit,” said Brent Gardner, chief government affairs officer at Americans for Prosperity. “The ‘Inflation Reduction Act’ doubles down on the subsidy boondoggle that has been plaguing Congress for years with handouts to EV companies at the expense of American taxpayers. There’s no reason someone making $50,000 a year should be subsidizing their neighbor’s $50,000 car. At the very least Congress should correct this absurd double-dipping provision, but an even better idea would be to end these subsidies altogether and quit playing favorites for political gain.”

The bill was co-sponsored by U.S. Sens. Bill Cassidy (R-La.), Steve Daines (R-Mont.), and Pat Toomey (R-Pa.).

The IRA extends the consumer tax credit of up to $7,500 for new electric vehicles, and it also provides $40 billion in loan authority for the Department of Energy Loan Programs Office, which can make loan guarantees for the manufacture of fuel-efficient vehicles or parts of those vehicles, including EVs and advanced diesel vehicles. The IRA also directly subsidizes auto manufacturing through grants and loans.

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