A group representing General Motors, Toyota Motor, Volkswagen and other major automakers said a US$430 billion bill approved Sunday by the US senate would put achieving US electric-vehicle adoption targets for 2030 in jeopardy.
“Unfortunately, the EV tax credit requirements will make most vehicles immediately ineligible for the incentive,” the Alliance for Automotive Innovation’s chief executive, John Bozzella, told Reuters, adding the bill “will also jeopardise our collective target of 40-50% electric vehicle sales by 2030.”
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The news agency noted the group had warned on Friday most EV models would not qualify for a $7,500 tax credit for US buyers under the bill.
To be eligible for the credit, vehicles must be assembled in North America, which would make some current EVs ineligible as soon as the bill takes effect.
According to the report, the Senate bill imposes other restrictions to deter automakers from using Chinese made materials by phasing in required percentages of North American sourced battery components. After 2023, vehicles with batteries that have Chinese components could not receive the credit, while critical minerals also face limitations on sourcing.
Reuters reported that senator Joe Manchin, who pushed for the restrictions, said EVs should not depend on foreign supply chains while senator Debbie Stabenow of Michigan said the credit is “unworkable.”
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataThe bill creates a $4,000 tax credit for used EVs, the report added. The package provides billions in new funding for EV production as well as $3 billion for the US Postal Service to buy EVs and battery charging equipment.
The new EV tax credits, which would expire in 2032, would be limited to trucks, vans and SUVs priced no more than $80,000 and cars up to $55,000. Families with adjusted gross incomes of up to $300,000 would be eligible, Reuters said.
The US House aims to vote on the bill on Friday, Reuters said, adding president Joe Biden in 2021 set a target for electric and plug in electric vehicles to comprise half of new vehicle sales in 2030.
