Democrat Senator Joe Manchin, who was integral in getting the new US tax credit put together and passed, is not happy that the original rules aren't being followed. He's already voiced concerns about various loopholes, and he wants the US Treasury Department to immediately pause issuing the $7,500 credit to cars that don't comply with guidelines related to battery components and materials.as part of the Inflation Reduction Act, and the new credit kicked in at the beginning of 2023.
In short, when the credit was put together, there were specific rules about where the batteries and battery materials had to come from in order for a car to get the full credit. The goal here was to bring more EV-related manufacturing to our shores. However, the Treasury Department still needs to issue final guidance on exactly how those rules are handled, and it can't get to the task until at least March 2023.
As far as battery materials are concerned, the law says that 40% of materials must be obtained and processed in the US or from a country that has a free-trade agreement with the US. The materials could also be sourced from a North American recycling facility. Beginning in 2027, the percentage rises to 80.
Ahead of 2024, 50% of battery components must be produced or assembled in North America. However, by 2029, that percentage moves to 100. At this point, some 40 new EVs are eligible for the full $7,500 credit. However, if Manchin gets his way, very few vehicles will qualify. In fact, there's a chance that not a single fully electric car in the US will be eligible for some time. Meanwhile,
Feels like they don’t want average people to own EV’s.
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