WASHINGTON, April 1 ― The US Treasury Department unveiled stricter electric vehicle tax rules yesterday that will reduce or remove tax credits on some zero-emission models but grant buyers another two weeks before the new requirements take effect.
US officials acknowledged some vehicles will see credits cut or eliminated. Tesla said on Wednesday the Model 3 rear-wheel drive credit will be reduced as a result of the guidance. The government will publish by April 18 a revised list of qualifying models and tax credit amounts. “Some EVs will certainly qualify for a partial credit. Given the constraints of the legislation, Treasury's done as well as it could to produce rules that meet the statute and reflect the current market,” Bozzella said.
On Tuesday, the United States and Japan inked a trade deal on EV battery minerals. Treasury says newly negotiated critical minerals agreements can be considered free trade agreements. The guidance lists Japan as having a US free trade deal. Senate Energy Committee chair Joe Manchin, a Democrat, said Treasury is ignoring the intent of the IRA in writing the guidance.