Most electric-vehicle models will be ineligible for U.S. tax credit

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Most electric-vehicle models will be ineligible for U.S. tax credit

A group of major automakers said on Friday that most electric-vehicle models would be ineligible for a $7,500 tax credit for U.S. buyers under a Democratic proposal in the U.S. Senate.

Automakers expressed concern about the proposal's increased requirements for vehicles' batteries and critical-mineral contents to be sourced from the United States.

Senators Chuck Schumer and Joe Manchin would make 70% of 72 U.S. electric, plug-in hybrid and fuel-cell EVs ineligible upon passage, according to org posts blog what-if-nevs qualify for the-ev tax credit.

When additional sourcing requirements go into effect, he said, none would qualify for full credit.

Car makers want significant changes to the proposal, which is part of a larger drug pricing, energy and tax bill.

Without the tax credit, the vehicles become more costly for American consumers, and this could affect demand and sales. It could slow progress toward President Joe Biden's goal of half of all new vehicles sold in 2030, as well as electric or plug-in hybrid models.

An analysis by the Congressional Budget Office on Wednesday suggested that only 11,000 new EVs would use the credit in 2023.

Manchin and Schumer's offices did not immediately make a statement. The Senate could vote on the bill as soon as Saturday.

Manchin said on Tuesday that he doesn't believe that we should be building a transportation mode on the backs of foreign supply chains.

The bill includes higher requirements for the percentage of battery components originating from North America based on value. It would disallow batteries with any Chinese components after 2023.

Bozzella wrote that a more gradual phase-in of the battery component, critical mineral and final assembly requirements that better reflect current geopolitical, sourcing and mineral extraction realities will preserve the credit for millions of Americans.

Automobiles want to expand countries from which batteries, battery components and critical minerals can be sourced to include NATO members, Japan and others.

The new EV tax credits, which would expire at the end of 2032, would be limited to trucks, vans and SUVs with suggested retail prices of no more than $80,000 and cars priced at no more than $55,000. They would only be limited to families with adjusted gross incomes of up to $300,000 annually.