© Reuters. Stricter electric vehicle tax credit rules take effect on April 18
by Michael Elkins
The US Treasury on Friday unveiled tougher tax rules for electric vehicles that will cut or reduce tax credits on some zero-emission models, but give buyers another two weeks before the new ones take effect. requirements.
Sourcing guidance for electric vehicle batteries issued on Friday triggers new requirements for critical minerals and battery components and takes effect for vehicle purchases from April 18.
The rules are intended to move the United States away from reliance on China for electric vehicle battery supply chains and part of President Joe Biden’s effort to make 50% of new vehicle sales in the United States to 2030 are electric vehicles or plug-in hybrids.
The $430 billion Inflation Reduction Act (IRA) removed EV sales limits from manufacturers, but placed new conditions on EV credits. They included a North American assembly requirement starting in August, buyer price and income eligibility limits starting January 1, and now critical mineral and battery sourcing rules, starting April 18.
The IRA requires that 50% of the value of battery components be produced or assembled in North America to qualify for a $3,750 credit and 40% of the value of critical minerals sourced from the United States or a free partner. trade also for a credit of $3750.
Senior Biden administration officials were candid that the new requirements will make it more difficult in the “short term” for consumers to take advantage of the new tax credits.
“Critical mineral and battery component requirements will reduce the number of EVs currently eligible for full credit in the near term, in order to create incentives to bring supply chains and manufacturing to the US,” it said. a senior US Treasury Department official told reporters “However, we believe these requirements will significantly increase the number of vehicles manufactured and sold in the US over the next decade.”
“Some EVs will certainly qualify for a partial credit. Given the restrictions in the legislation, Treasury did the best it could to produce rules that are compliant with the statute and reflect the current market,” said John Bozzella, executive director of the Alliance for Automotive Innovation. .
On Tuesday, the United States and Japan signed a trade agreement on minerals for electric vehicle batteries. The Treasury says that the newly negotiated critical mineral agreements can be considered free trade agreements. The guide lists that Japan has a free trade agreement with the United States.
The government will publish a revised list of qualified models and tax credit amounts by April 18.
