Reuters. FILE PHOTO: On the General Motors corporate headquarters in Detroit, Michigan, United States, on March 16, 2021, appears the new GM logo. Rebecca Cook for Reuters Author: David Shepardson
White House (Reuters) – According to a group of significant automakers, the majority of electric vehicle models would not be qualified for a $7,500 tax credit for American consumers under a Democratic proposal in the U.S. Senate.
Privately, automakers have expressed alarm about the proposal’s escalating demands that the essential minerals and batteries in automobiles come from the United States.
According to John Bozzella, the Alliance for Automotive Innovation, which includes General Motors (NYSE: GM), Toyota Motor (NYSE: TM), and Ford Motor (NYSE: F) among others, would disqualify 70% of the 72 electric, plug-in hybrid, and fuel-cell EVs sold in the United States after being passed on July 27.
When new sourcing rules take effect, “none would be eligible for the entire credit,” he said.
The plan, which is a component of a wider energy, tax, and medicine pricing measure, is the subject of considerable amendments sought by the auto industry.
Without the tax credit, American consumers would have to pay more for the automobiles, which could affect demand and sales. Additionally, it might hinder President Joe Biden’s goal of having half of all new cars sold in 2030 be electric or plug-in hybrid versions.
Just 11,000 new EVs, according to a Congressional Budget Office report released on Wednesday, are expected to use the credit in 2023.
The offices of Manchin and Schumer did not respond right away. The bill might be voted on by the Senate as soon as this Saturday.
Manchin stated on Tuesday, “I don’t believe that we should be establishing a transportation mode on the backs of foreign supply chains.
According to value, the bill includes increasing criteria for the proportion of battery components made in North America. It would be prohibited for batteries to contain any Chinese components after 2023.
“Millions of Americans will retain the credit with a more progressive phase-in of the battery component, essential mineral, and final assembly requirements that better reflect contemporary geopolitical, sourcing, and mineral extraction realities,” stated Bozzella.
Automakers seek to put NATO members, Japan, and other nations on the list of nations from which batteries, battery components, and essential minerals can be purchased.
The proposed EV tax credits, which would end in 2032, would only apply to cars priced at no more than $55,000 and trucks, vans, and SUVs with suggested retail values no higher than $80,000. They would only be available to households making up to $300,000 in annual adjusted gross income.