Tesla Cybertruck Ford Mustang Mach-E electric SUV 2020 Corvette C8 Tesla Model S Review Jeep Gladiator Review 2020 Kia Telluride Review Best cars under $30,000 Best luxury SUVs Best hybrid cars Favorite car tech features

In blow to Tesla and GM, federal electric car tax credit not extended

The legislation wasn't included in a larger spending bill Congress is set to pass before the end of the year.

Listen
- 01:23

Act quickly before the credits are totally gone.

Chevrolet

Tesla and General Motors will need to face the reality that there won't be an extension of the federal electric car tax credit -- at least not this year.

Reuters first reported Monday that a final spending deal to avoid a government shutdown will not include legislation to raise the cap on federal electric car tax credits. Both GM and Tesla's lobbying efforts grabbed attention as Congress worked to shove the legislation into the grander spending bill.

Read more: The best tax software for 2020: TurboTax, H&R Block, TaxSlayer and more

The proposal would have lifted the cap from 200,000 qualifying vehicles to 600,000 vehicles and would have given both Tesla and GM a lot more wiggle room. The latest proposal would have also reduced the amount buyers can claim by $500. Tesla will be completely out of tax credits at the end of this year. Right now, buyers only give one-fourth of the original $7,500 amount. GM's will run dry in March.

Now playing: Watch this: Five more things you need to know about the 2019 Chevrolet...
2:30

According to the report, adding the EV tax credit extension received a lot of pushback from the White House. President Trump has also outright called for the program's end, though Republican lawmakers were not successful in scrapping it altogether when the party was in control of the House of Representatives. Various pieces of legislation from both parties have been unsuccessful in modifying or extending the program.

Automakers maintaining the tax credit is a boon to the EV market and helps offset the higher cost of the vehicles. Critics argue it remains an extra perk for the wealthy, since these credits apply to even the most expensive electric cars.