Campaign to Limit Electric Vehicle Tax Credit Gathers Momentum in Senate

A Tesla Model S in Nantucket, Mass., on June 24, 2018. The luxury Model S would not be eligible for a tax credit in legislation proposed by Sens. Joni Ernst and Mike Braun. Noam Galai/Getty Images for Nantucket Film Festival

WASHINGTON—Republican Sens. Joni Ernst of Iowa and Mike Braun of Indiana are proposing to limit the federal tax credit for electric vehicles (EVs) to those costing $45,000 or less and end the subsidy entirely for affluent buyers.

Depending on the price of the EV purchased, the tax credit allows buyers to deduct between $2,500 and $7,500 from their federal taxes. The credit first went into effect in 2011.