The percentage of battery components originating from North America is a limiting factor.
As well, households with an adjusted annual gross income of up to $300,000 would be ineligible as well.
This is a complicated Bill, dubbed the Inflation Reduction Act, which covers numerous other aspects other than the automobile. Our interests rest with the EV incentives, tax credit applications, and the lifting of caps.
While the Senate still has to vote on the Bill, the highs include the lifting of the 200,000-vehicle limit per manufacturer for the tax breaks. Automakers such as Tesla and GM ran out of credits simply because they’d managed to sell 200,001 EVs – if all goes to plan, that cap will be removed. The $7,500 will last until 2032. It will be limited to trucks, vans, and SUVs with suggested retail prices of no more than $80,000 and to cars priced at no more than $55,000. As well, only for families that make less than $300,000 annually according to Reuters.
The credit however would have strings attached. In order to get the full amount, the proposal states extra requirements for vehicle batteries and critical-mineral contents that will need to be sourced from the United States. The issue here is that only about 30% of EVs sold in the US would then qualify for partial credits. More than 2/3 of the 72 EVs, PHEVs, and FCVs offered by automakers would not meet the new obligations.
John Bozzella, head of the Alliance for Automotive Innovation, said: “None would qualify for the full credit when additional sourcing requirements go into effect.”
Senator Joe Manchin, who has criticized the incentive for months, said: “I don’t believe that we should be building a transportation mode on the backs of foreign supply chains.”
As part of these new battery requirements, those with any Chinese components would be completely ineligible for incentives.