As the U.S. looks to reduce its dependence on foreign countries for battery supply chains for EVs, many are set to lose out on the full $7,500 federal tax credit, with only a few qualifying for it. The U.S. Treasury Department has proposed new rules to take effect on April 18 that will require automakers to certify their EVs’ battery parts and minerals. The rules, which are expected to slow consumer acceptance of EVs, will result in many EVs getting only half the credit or none at all.
According to Kelley Blue Book, electric vehicles currently cost an average of over $58,000, a price that is out of reach for many households in the U.S. The tax credits are meant to bring prices down and attract more buyers, but a $3,750 credit may not be enough to entice buyers away from gasoline-powered vehicles.
President Joe Biden’s goal is for half of new passenger vehicles sold in the U.S. to run on electricity by 2030. While the new rules are likely to delay the achievement of this goal, administration officials argue that they will result in the creation of a domestic supply chain and more jobs in the long term. They believe that more EVs and parts will be manufactured in the U.S., ending the country’s dependence on China for parts and minerals.
The Alliance for Automotive Innovation, an industry trade group, has warned that only a few of the 91 EV models currently available in the U.S. are expected to qualify for the full credit, while some will be eligible for only half.
