New $7,500 EV Tax Credit Passes Senate, But Will Require Carmakers To End Reliance On Chinese Batteries | Carscoops

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New $7,500 EV Tax Credit Passes Senate, But Will Require Carmakers To End Reliance On Chinese Batteries | Carscoops carscoops

points out that no vehicle currently in production today would be eligible for the tax credit if the 2024 regulations were put in place immediately. John Bozzella, president and CEO of the Alliance of Automotive Innovation is quoted as saying, “The $7500 credit might exist on paper, but no vehicles will qualify for this purchase incentive over the next few years.” That means that manufacturers will have to act quickly if they want to keep their vehicles eligible.

“There are 72 EV models currently available for purchase in the United States including battery, plug-in hybrid and fuel cell electric vehicles,” writes Bozzella in awould qualify for the full credit when additional sourcing requirements go into effect. Zero.” That small part about “or a US trading partner” makes a huge difference because it makes this part of the bill less about actually producing the batteries in North America and more about making sure that they’re not made in China. US trading partners include South Korea, Singapore, Mexico, Australia, Bahrain, and more.

In addition, what matters is that the battery components can’t just be manufactured anywhere so long as it’s by an American company. For example, Tesla can’t build a battery in Shanghai and still qualify for the credit. Despite that, we expect the bill to benefit Tesla along with lots of other EV makers

. Most major manufacturers are in the midst of working on new battery production facilities which could keep them in line with the stipulations set for 2024 and beyond.

 

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