© Reuters. FILE PHOTO: Tesla's new Cybertruck is shown on display at a Tesla store in San Diego, California, U.S., December 9, 2023. REUTERS/Mike Blake/File Photo
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By David Shepardson
WASHINGTON (Reuters) -Many electric vehicles lost eligibility for tax credits of up to $7,500 after new battery sourcing rules took effect on Monday, including the Nissan (OTC Leaf, Tesla (NASDAQ Cybertruck All-Wheel Drive and some Tesla Model 3 and Chevrolet Blazer EV, the US Treasury said.
The Treasury issued guidance in December detailing new battery sourcing requirements aimed at shifting the U.S. electric vehicle supply chain away from China. They came into effect on Monday.
The number of EV models that qualify for EV tax credits in the U.S. fell from 43 to 19. Those numbers include different versions of the same type of vehicle. The Treasury said some manufacturers have yet to submit information on eligible vehicles, which could lead to changes to the list.
Tesla had no immediate comment Monday, but said on its website that “the Cybertruck will likely qualify for the federal tax credit later in 2024.”
The new rules allow buyers to claim the tax credit of up to $7,500 at a participating dealership at the point of sale. The tax credit sets limits on the price of the vehicle and the buyer's income to qualify.
The Volkswagen (ETR:) ID.4, the rear-wheel drive Tesla Model 3, the BMW (ETR:) X5 xDrive50e, the Audi Q5 PHEV 55, the Cadillac Lyriq and the Ford E-Transit are among the vehicles that fell from the list of vehicles eligible for tax credits.
Volkswagen said Monday that it “is in the process of confirming eligibility for a federal electric vehicle tax credit” after Jan. 1.
“We are optimistic that ID.4 MY2023 and all ID.4 MY2024 will be eligible under the new rules,” VW added.
BMW had no immediate comment.
Nissan said it is working with suppliers in an effort to comply with the changing requirements “and regain tax credit eligibility for the Nissan Leaf in the future.”
The Treasury said that “automakers are adjusting their supply chains to ensure buyers remain eligible for the new clean vehicle credit, partnering with allies and bringing jobs and investment to the United States.”
Ford Motor (NYSE said last month that its E-Transit would lose the $3,750 tax credit, as would the Mach-E plug-in hybrid and Lincoln Aviator Grand Touring, but its F-150 EV Lighting and Lincoln Corsair Grand Touring retained credits.
General Motors (NYSE 🙂 noted that all of its electric vehicles would temporarily lose eligibility except for the Chevrolet Bolt, adding that the Lyriq and Blazer EV are losing the credit due to two minor components.
GM expects that after a sourcing change, the Lyriq and Blazer EV will regain eligibility in early 2024 and said its Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV and Cadillac OPTIQ produced “after the sourcing change will be eligible for the full incentive.
The Inflation Reduction Act of 2022 reformed the electric vehicle tax credit, requiring vehicles to be assembled in North America to qualify for any tax credit, eliminating nearly 70% of eligible models at the time.
Tesla revealed in December that its long-range, rear-drive Model 3 vehicles would lose federal tax credits starting January 1. Model 3 Performance retains $7,500 credit.
