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.
Featured Coverage of this Story
From the Right
Biden Admin Issues Sweeping EV Tax Credit Rules, Leaving Door Open For Foreign Companies
The U.S. Internal Revenue Service (IRS) announced new guidance on how it will interpret President Joe Biden’s signature Inflation Reduction Act (IRA), leaving the door open for European automakers to cash in on the bill’s subsidies.
The new rules are expected to immediately limit the number of electric vehicles that qualify for tax credits when they go into effect on April 18, thanks to stricter requirements for both sourcing battery components and manufacturing in the U.S. or nations that have a “free trade agreement” with the U.S., Axios reported. The Biden administration has...
From the Left
Many electric vehicles to lose big tax credit with new rules
Fewer new electric vehicles will qualify for a full $7,500 federal tax credit later this year, and many will get only half that, under rules proposed Friday by the U.S. Treasury Department.
The rules, required under last year’s Inflation Reduction Act, are likely to slow consumer acceptance of electric vehicles and could delay President Joe Biden’s ambitious goal that half of new passenger vehicles sold in the U.S. run on electricity by 2030.
The new rules take effect April 18 and are aimed at reducing U.S. dependence on China and other countries for...
From the Center
US Unveils Stricter EV Tax Credit Rules To Take Effect April 18
The U.S. Treasury Department on Friday unveiled stricter electric vehicle tax rules that will reduce or cut tax credits on some zero-emission models but grant buyers another two weeks before the new requirements take effect.
The rules are aimed at weaning the United States off dependence on China for EV battery supply chains and part of President Joe Biden's effort to make 50% of U.S. new vehicle sales by 2030 EVs or plug-in hybrids.
The EV battery sourcing guidance issued on Friday triggers new requirements for critical minerals and battery...
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