BMW, Rivian, Hyundai and Volvo lose access to electric vehicle tax credit
The U.S. Treasury has updated its list of electric vehicles eligible for a $7,500 electric vehicle tax credit under its new battery sourcing rules, and BMW , Nissan, Rivian, Hyundai, Volvo and Volkswagen are no longer on it.
The new requirements will take effect on Tuesday and will also reduce credits for the Tesla Model 3 to $3,750. Other Tesla models will still be eligible for the full $7,500 credit. All General Motors electric vehicles, including the Chevrolet Bolt and Bolt EUV, will also be eligible for full credit.
Electric vehicle tax credits were mandated by Congress last August as part of the Inflation Reduction Act. The IRA requires that 50% of the value of battery components be produced or assembled in North America to qualify for $3,750. To qualify for the remaining $3,750, 40% of the value of critical materials must come from the United States or a country that has signed a free trade agreement.
The rules are designed to help the United States reduce its dependence on China for the supply of electric vehicle batteries and strengthen its own ability to control the supply chain. President Joe Biden is aiming for 50% of new vehicle sales in the United States to be electric or hybrid by 2030.
The Treasury's decision to put its guidelines into effect this week follows tough new emissions rules proposed by the Environmental Protection Agency, which say 60% of new vehicle sales in 2030 will be electric.
EVs that will lose credits on Tuesday are the BMW 330e, BMW X5 xDrive45e, Genesis Electrified GV70, Nissan Leaf, Rivian R1S and R1T and Volkswagen ID.4 - although VW thinks it will get the ID.4 to qualify and simply awaits documentation from a vendor to determine eligibility. Plug-in hybrid vehicles like the Audi Q5 TFSI e Quattro and the Volvo S60 will also lose credits.
In addition, Ford and Stellantis vehicles that were previously eligible for the full tax credit will now only have access to half.
With the exception of Volvo, which is a Swedish company but majority-owned by Chinese Geely, most automakers plan to build battery factories in the United States
Hyundai and Rivian, for example, are building factories in Georgia. Volkswagen builds the ID.4 in Chattanooga, Tennessee, and chose Ontario, Canada as the location for its North American battery plant. BMW invests $1.7 billion in vehicle and battery manufacturing in South Carolina.
There is a loophole for electric vehicles that are not eligible for consumption tax credits. The Treasury said in December that ineligible electric vehicles could potentially qualify for a commercial lease credit, also worth $7,500.
The U.S. Treasury has updated its list of electric vehicles eligible for a $7,500 electric vehicle tax credit under its new battery sourcing rules, and BMW , Nissan, Rivian, Hyundai, Volvo and Volkswagen are no longer on it.
The new requirements will take effect on Tuesday and will also reduce credits for the Tesla Model 3 to $3,750. Other Tesla models will still be eligible for the full $7,500 credit. All General Motors electric vehicles, including the Chevrolet Bolt and Bolt EUV, will also be eligible for full credit.
Electric vehicle tax credits were mandated by Congress last August as part of the Inflation Reduction Act. The IRA requires that 50% of the value of battery components be produced or assembled in North America to qualify for $3,750. To qualify for the remaining $3,750, 40% of the value of critical materials must come from the United States or a country that has signed a free trade agreement.
The rules are designed to help the United States reduce its dependence on China for the supply of electric vehicle batteries and strengthen its own ability to control the supply chain. President Joe Biden is aiming for 50% of new vehicle sales in the United States to be electric or hybrid by 2030.
The Treasury's decision to put its guidelines into effect this week follows tough new emissions rules proposed by the Environmental Protection Agency, which say 60% of new vehicle sales in 2030 will be electric.
EVs that will lose credits on Tuesday are the BMW 330e, BMW X5 xDrive45e, Genesis Electrified GV70, Nissan Leaf, Rivian R1S and R1T and Volkswagen ID.4 - although VW thinks it will get the ID.4 to qualify and simply awaits documentation from a vendor to determine eligibility. Plug-in hybrid vehicles like the Audi Q5 TFSI e Quattro and the Volvo S60 will also lose credits.
In addition, Ford and Stellantis vehicles that were previously eligible for the full tax credit will now only have access to half.
With the exception of Volvo, which is a Swedish company but majority-owned by Chinese Geely, most automakers plan to build battery factories in the United States
Hyundai and Rivian, for example, are building factories in Georgia. Volkswagen builds the ID.4 in Chattanooga, Tennessee, and chose Ontario, Canada as the location for its North American battery plant. BMW invests $1.7 billion in vehicle and battery manufacturing in South Carolina.
There is a loophole for electric vehicles that are not eligible for consumption tax credits. The Treasury said in December that ineligible electric vehicles could potentially qualify for a commercial lease credit, also worth $7,500.
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