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Biden Administration Tightens EV Tax Credit Rules

  • The new tax credit rules exclude vehicles with battery components made by Chinese companies.
  • Eligibility for the credit now depends on the manufacturing location of battery components and parts.
  • Some popular models like Tesla's Cybertruck and Nissan’s Leaf no longer qualify for the tax credit.

Just as EV demand appeared to be nearing super-saturation, incentives for buying electric vehicles are starting to fall by the wayside.

There are now just 13 EV models that are eligible for a consumer tax credit of as much as $7,500 thanks to new Biden administration rules that took effect on January 1, according to Bloomberg

Previously, the number had stood closer to 24 models, but for the new year the tax credit excludes vehicles that use battery components manufactured by Chinese companies, the report says. 

“Automakers are adjusting their supply chains to ensure buyers continue to be eligible for the new clean vehicle credit, partnering with allies and bringing jobs and investment back to the United States,” said Treasury Department spokeswoman Ashley Schapitl.

She also commented that some companies were still in the process of submitted data to see if they qualify for the credit. 

Last month, the Treasury Department announced rules targeting battery components made by companies under Chinese jurisdiction or with at least 25% Chinese government ownership, the report says. 

These regulations, expanding in 2025 to include suppliers of essential battery materials like nickel and lithium, are part of President Joe Biden's climate law, influenced by Senator Joe Manchin.

Manchin, pivotal in passing the Inflation Reduction Act, aimed to address concerns over U.S. taxpayer money subsidizing Chinese-made batteries.

As Bloomberg notes, depending on the manufacturing location of battery components and parts, vehicles may qualify for a $7,500 or $3,750 credit.

Eligible models for the full or partial credit include Tesla's Model Y, Rivian’s R1T, Stellantis's Jeep Wrangler 4xe, and Ford's F-150 Lightning. However, Tesla's Cybertruck, certain Model 3 versions, Nissan’s Leaf, Ford’s E-Transit van, and GM’s electric Blazer and Silverado lost credit access.


By Zerohedge.com

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