U.S. Senate Electric Automobile Tax Credit Score Plan Faces Questions, Auto News, ET Auto


U.S. automakers and lawmakers on Thursday carefully considered the main points of a proposed expansion of the electric car tax credit that would help factories retool to build green cars and reduce greenhouse gas emissions .

Under a deal announced by Senator Chuck Schumer, the 200,000-vehicle producer cap on the $7,500 electric vehicle tax credit could be lifted and a new $4,000 tax credit for used electric vehicles followed. Lawmakers and automaker executives want to know more about whether content sourcing requirements will prevent many, if not all, electric vehicles from getting a tax credit and whether buyers will be able to use it at the time of sale.

The new electric vehicle tax credit could be linked to new annual supply requirements for minerals and essential elements used in batteries. Congressional aides and automakers said the provisions were aimed at China, which produces much of the sector’s critical minerals for batteries.

“The basic structure suits me,” representative Dan Kildee told Reuters. He needs additional main points on “our ability to source these materials…” We want to make sure it’s doable and does what we wanted it to.

Schumer told reporters that the electric vehicle provisions would represent only a “very small” amount of the predicted 40% reduction in emissions expected from the bill.

Schumer said Manchin had “some real disagreements” over the electric vehicle tax credit “so we tried to come back to a compromise. That’s not all I would need anymore.

General Motors, which pushed Congress to lift the cap, said it would “evaluate the text content project and look forward to coming forward with Congress on provisions that will ensure some degree of enjoyment will be recorded.”

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

Last year, President Joe Biden proposed increasing electric vehicle tax credits to $12,500 per vehicle — including $4,500 for union-made vehicles — and ensuring that credits only apply to vehicles manufactured in the United States.

Schumer Manchin’s proposal removed union and US production requirements. It keeps the maximum credit at $7,500 per EV. Canada on Thursday welcomed the revised bill that does not include the United States-only provision.

The bill includes increasing requirements for the percentage of North American battery components by value and would ban all batteries after 2023 with Chinese battery components. Some auto executives say the deadlines for the requirements are too aggressive and will prevent the use of credit.

Automakers including GM and Tesla have hit the cap and are no longer eligible for the existing electric vehicle tax credit, while Toyota Motor Corp said this month it had hit the cap, which means its credit will be phased out in 2023.

The new electric vehicle tax credits would be limited to trucks, vans and SUVs with a suggested retail price of no more than $80,000 and cars with a price of no more than $55,000. They would be limited to families whose adjusted gross income does not exceed $300,000 per year.

Biden’s goal is for electric vehicles to account for half of all new vehicles sold by 2030.

Zero Emission Transportation Association executive director Joe Britten said the EV credit “is going to be a huge accelerator to getting a foothold” in US battery manufacturing and important minerals.


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