Congress introduced a bipartisan bill Wednesday that will increase the reach of an existing electric vehicle tax credit.
The bill will increase the electric vehicle tax credit enjoyed by electric vehicle car buyers to 400,000 vehicles per manufacturer. Two of the biggest beneficiaries will be Tesla (TSLA) - Get Tesla Inc Report and General Motors (GM) - Get General Motors Company (GM) Report .
Tesla shares were up 1.26% to $275.75 on Wednesday, while GM rose 0.75% to $19.15.
Governments around the world, namely China, are trying to incentivize the use of cleaner vehicles to decrease toxic emissions. The $7,500 tax credit to consumers does that. But it's also good for the electric vehicle makers, who simply enjoy increased demand. Once the manufacturer reaches sales of 200,000, however, the tax credit gets cut in half. That already has happened to both Tesla and GM.
The "Driving America Forward Act," sponsored by Democratic Sens. Debbie Stabenow (Michigan) and Gary Peters (Michigan), Republican Sens. Lamar Alexander (Tennessee) and Susan Collins (Maine) and Democratic Rep. Dan Kildee (Michigan), enacts a $7,000 tax credit for an additional 400,000 vehicles per manufacturer.
The bill also would extend the hydrogen fuel cell credit through 2028.
Tesla shares are down 17% year to date.