US Senate Democratic electric vehicle tax credit plan in question Auto News, ET Auto

US Senate Democratic electric vehicle tax credit plan in question

Automakers and US lawmakers were closely reviewing details on Thursday of a proposed expansion of the electric vehicle tax credit that could help factories to manufacture green vehicles and cut greenhouse gas emissions.

Under a deal announced by Senator Chuck Schumer, the $200,000-per-vehicle cap on the $7,500 EV tax credit would be removed and a new $4,000 used EV tax credit would be adopted. Lawmakers and automakers want to know more about whether all EVs will be barred from material sourcing requirements from receiving the tax credit and if consumers will be able to use it at the time of sale.

The new EV tax credit will be subject to increased annual sourcing requirements for critical minerals and components used in batteries. Congressional aides and automakers said the provisions were aimed at China, which produces much of the world’s important minerals for batteries.

“I’m fine with the original structure,” representative Dan Kildy told Reuters. He wants more details on “our ability to source these materials…” We need to make sure it’s practical and that it does what we wanted.

Schumer told reporters that EV provisions would account for a “very small” amount of the estimated 40% reduction in emissions expected from the bill.

Schumer said Munchkin had “some real disagreements” about the EV tax credit “so we tried to strike a compromise. It’s not everything I want.”

General Motors, which has prompted Congress to lift the cap, said it will “review the text of the draft and looks forward to working with Congress on these provisions that will ensure an even playing field.”

See also  Which car models deserve to be their own separate brand?

The bill also includes billions of new loans and grants for auto production, including a $10 billion investment tax credit to build clean-technology manufacturing facilities, a $2 billion cash grant to retrofit existing auto manufacturing facilities, and build new ones. for loans of up to $20 billion. Clean vehicle manufacturing facilities.

Last year, President Joe Biden proposed increasing the EV tax credit to $12,500 per vehicle — including $4,500 for union-built vehicles — and eventually applying the credits only to U.S.-built vehicles.

The Schumer Manchin proposal omitted Union and American production requirements. This puts the maximum credit at $7,500 per EV. Canada on Thursday lauded the amended bill that does not include only the US provision.

The bill includes increasing requirements for a percentage of North American battery components by value and will discontinue any battery with any Chinese battery components after 2023. The deadlines for some auto executives requirements are too aggressive and will withhold the use of credits.

Automakers including GM and Tesla hit the cap and are no longer eligible for the current EV tax credit, while Toyota Motor Corp. said this month it has hit the cap, meaning its credit will expire in 2023.

The new EV tax credits will be limited to trucks, vans and SUVs with a retail price of no more than $80,000 and cars costing no more than $55,000. They will be limited to households with an adjusted gross income of up to $300,000 annually.

Biden aims to include EVs in all new vehicles sold in 2030.

See also  Top 10 Best Selling Car Brands in India (July 2022) - Maruti Hyundai and Tata Dominate as Complete Podium

Joe Britton, executive director of the Zero Emissions Transportation Association, said EV credits are “going to be a big accelerator to invest in” in the production of American batteries and critical minerals.