Toyota Motor Corp. has used up a key U.S. tax credit score for hybrid and electrical automobiles, a milestone that the automaker says will elevate its prices and hinder adoption of climate-friendly vehicles.

The corporate mentioned Friday that it bought 3,876 plug-in hybrid and electrical vehicles in June. The U.S. permits automakers to supply a $7,500 tax credit score to consumers of totally or partly electrical vehicles, however solely as much as 200,000 per firm. Toyota’s cumulative gross sales of eligible automobiles have now surpassed that threshold, in accordance with information compiled by Bloomberg and confirmed with the corporate.

The Japanese producer turns into the third automaker to hit the restrict, becoming a member of Normal Motors and Tesla Inc. Demand for EVs has steadily grown within the U.S. over the previous few years.

Toyota and its rivals have lobbied Congress for an extension of the tax credit, however they disagree on who must be eligible. Toyota and Tesla oppose a proposal by the Biden administration to supply a further $4,500 in credit to unionized carmakers, a place favored by GM, Ford Motor Co. and Stellantis NV.

Absent Congressional motion, Toyota’s credit will progressively be decreased over a one-year interval as soon as the Inner Income Service determines the cap has been reached. The credit shall be halved twice over 12 months earlier than operating out totally.