I tend to think that any refundable tax credit like this and the one for solar panels distort the market and is basically free money for the companies involved. The real price to consumers on a $42k car is $35k. That makes it a lot more palatable to customers while the company gets to charge a higher price at taxpayer expense. And you’ll notice the sweet spot for a lot of new EVs is the low 40Ks. That puts them close to but a little more than conventional vehicles once you factor in the tax credits. It’s no coincidence.

I think instead of phasing them out based on how many EVs a car company sells, the government should start phasing out the EV tax credit by $1000 a year. The car companies will be forced to compete on price on the lower end and in seven years when it’s gone the mix of EVs to ICE will be higher and there will be more EV options to choose from so they won’t need to be incentivized through refundable tax credits.