Fewer electric vehicles will be eligible for US tax credits in 2024

Purchases of popular models like the Tesla Model 3 and Ford Mustang Mach-E may no longer qualify for tax savings as cars do not meet stricter procurement criteria. requirements.

Efforts to combat global warming could suffer a setback next year when new rules reduce the number of electric cars that qualify for a tax credit federal.

< p class="css-at9mc1 evys1bk0">The credits, of up to $7,500 per vehicle, have helped make electric cars more affordable, bringing the cost of some models below $30,000 . Next year, for the first time, dealers will be able to give buyers credit when they buy a car, rather than asking them to claim it on their tax return.

But it will become more difficult to obtain that subsidy on January 1 due to Biden administration rules intended to encourage automakers to make vehicles and parts in North America, while bypassing China . Most automakers are still far from ending their dependence on China for batteries and essential materials like refined lithium.

The rules stricter regulations, which arise from the Inflation Reduction Act, another obstacle to electric vehicles. Sales of these cars and trucks are already growing more slowly than a year ago due to high interest rates and driver anxiety about finding charging stations.

Electric vehicles remain the fastest. - growing segment of the auto industry, and Americans have already purchased more than a million of them this year. Sales will grow another 32% in 2024, according to BloombergNEF, up from 47% in 2023. But Ford Motor, General Motors and Tesla have slowed their investments as the pace of growth has slowed.

The list of fully electric vehicles eligible for tax credits was already limited. Under rules that took effect this year, the credit was only available for cars made in North America.

ImageNissan's electric Leaf is eligible for half of the $7,500 credit this year.Credit...Ross Mantle for The New York Times

To recover the full credit, automakers also must meet quotas on the quantity of their battery components and certain raw materials coming from the United States or trade allies. Tesla, General Motors, Ford, Volkswagen, Rivian and Nissan are the only companies to offer electric cars qualifying for at least partial credit. Some plug-in hybrid cars from Audi, BMW, Chrysler, Jeep and Lincoln also get tax breaks.

The new rules that took effect Jan. 1 add another set restrictions. , disqualifying vehicles containing components made in China or manufactured elsewhere by a company under the control of the Chinese government.

“If it was already confusing to consumers, becomes even more confusing,” said Kevin Roberts, director of industry insights and analytics at CarGurus, an online marketplace.

Tesla, which accounts for half of all electric vehicles sold in the United States. States, warned on its website that the cheapest Model 3 sedan and a long-range version would no longer be eligible after December 31. The cars are equipped with a battery made in China. Existing credits lowered the price of the base Model 3 to around $30,000, on par with similar equipment...