Auto News

Will the EV tax credit withstand Senate and industry opposition?

The 200,000-vehicle limit per automaker has been lifted with Democrats’ new consumer credits for buying battery-electric, plug-in hybrid and fuel-cell vehicles, but General Motors, Toyota and Tesla are all set to do just that. This is beyond the procurement of critical minerals and batteries, as well as vehicle sticker prices and buyer income limits.

As of Friday, the appropriations bill was undergoing formal review by senators. Provisions such as the EV tax credit may be removed from the bill if they do not directly affect federal revenue, as required by the budget adjustment process.

The bill could go to a vote by the end of this week or early Monday, but Democrats would need a simple majority, or the vote of 50 senators and the vice president, so without West Virginia’s Manchin. It cannot be passed by an equal number of Senates. The bill’s fate also hinges on the support of fellow Democratic Senator Kirsten Cinema of Arizona. Republicans are not expected to vote on the bill.

While supporting Manchin’s goal of reducing its dependence on countries, including China, for critical minerals, automakers represented by the Alliance for Automotive Innovation: express concern We learned this week that eligibility may decline in the short term as tax credit rules are proposed.

“As a result of this bill, which is currently being drafted, a significant number of consumers will seek credit in the early stages when it is most needed,” said John Bozera, CEO of the Alliance. It may not be available,” he said.

Many of the group’s members, including Detroit 3, Toyota and Volkswagen, Forming partnerships Jointly develop raw materials and EV battery component businesses with North American battery suppliers and other EV-related companies.

“It’s a smooth process, but it’s also a change that doesn’t happen overnight,” Bozera said.

The American International Automobile Dealers Association, which represents more than 9,000 international nameplate dealers in the United States, also warned of the eligibility limitations of the proposal.

AIADA CEO Cody Rusk said, “Auto dealers will try to explain to consumers why these incentives are not available.” in a twitter post this week.

Under this proposal, if 40% of the critical minerals used in the battery were extracted or processed in the United States or a country with which the United States has a free trade agreement, the vehicle would be eligible for half the credit, or $3,750. I have. Or from materials recycled in North America. After 2024, the requirement will increase each year, reaching 80% by 2027.

Eligibility for the other half of the credit depends on whether 50% of the battery components are manufactured or assembled in North America. After 2024, this requirement will also increase year by year, reaching 100% by 2029.

Final assembly of the vehicle must also be done in North America, a provision that applies shortly after the legislation is enacted.

Starting in 2024, vehicles with battery components manufactured or assembled by entities deemed federally affiliated, such as China, will be ineligible for credit. Vehicles with vital minerals extracted, processed, or recycled by these bodies will not be eligible until 2025.

The tax credit is applied at the point of sale and expires after December 31, 2032.

GM CEO Mary Barra joined the company on Thursday, August 4th. President Joe Biden and other business leaders hold a virtual discussion on the benefits of the Inflation Reduction Act. She said she was “deeply grateful” for the Detroit automaker to include her EV tax credit.

“Some goals won’t be achieved overnight, but GM’s significant investments in manufacturing, labor, infrastructure, supply chains, and clean energy will help establish America as a We are confident that we are a global leader today and in the future.” Will the EV tax credit withstand Senate and industry opposition?

Back to top button