Headline RoundupMarch 31st, 2023

Fewer Electric Vehicles Qualify for Tax Credits Under New Rules

Summary from the AllSides News Team

New rules taking effect on April 18 will reduce or cut tax credits for many electric vehicles in the United States.

The Details: The rules, proposed by the Treasury Department as required under the Inflation Reduction Act, will qualify fewer new electric vehicles (EVs) for a full $7,500 federal tax credit. The rules include stricter requirements on sourcing minerals for batteries, and mandates manufacturing in the U.S. or nations that have a “free trade agreement” with the U.S.

For Context: The Inflation Reduction Act (IRA) eliminated manufacturer's EV sales caps but imposed new conditions on EV credits, including income eligibility caps and a North American assembly requirement.

Key Quotes: The Treasury Department said the new rules "will lower costs for consumers, build a resilient industrial base and spur manufacturing in the U.S." Sen. Joe Manchin (D-WV) said the Biden administration "continues to ignore the purpose" of the Inflation Reduction Act, "which is to bring manufacturing back to America and ensure we have reliable and secure supply chains."

How the Media Covered It: Left- and right-rated media framed the rules negatively, but on different grounds. Some right-rated outlets suggested the rules will enable foreign car manufacturers to overtake U.S. auto companies in the EV market. Some left-rated outlets focused on how reduced tax credits may lead fewer to buy EVs, which would likely delay Biden's goal of having 50% of new passenger vehicles sold in the U.S. be EVs by 2030.

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