Source: Business Insider
Photo Source: Unsplash, Vlad Tchempalov
There are now more than 70 battery-powered, plug-in hybrid, and fuel-cell electric vehicles available, including the Rivian R1T. Rivian
Electric vehicles from Tesla, Ford, and General Motors might qualify for new $7,500 tax breaks.
The climate bill has price and manufacturing requirements that disqualify most current models.
Some automakers are pushing for delays until they can shift supply chains away from Asia.
Electric vehicle makers, advocates, and market analysts have been poring over the massive climate bill to understand what models might be eligible for up to $7,500 in tax credits at the time of purchase.
There are now more than 70 battery-powered, plug-in hybrid, and fuel-cell electric vehicles available. But once President Joe Biden signs the Inflation Reduction into law, any vehicle that isn't assembled in North America no longer qualifies — eliminating 70% of what's on the market, said Auto Innovators Alliance President John Bozzella.
By the beginning of 2023, further restrictions on price and where battery components are manufactured and mined take effect. Only SUVs, vans, and pickups priced below $80,000, and cars below $55,000, will qualify.
A vehicle's battery also must be made with a certain amount of parts and critical minerals either sourced in North America or from countries with which the US has a free-trade agreement. This rules out China, where the vast majority of minerals and battery components are now sourced from, according to the International Energy Agency. In the meantime, some EV companies including Rivian are trying to get ahead of the new requirements by working with customers to sign a contract now for an SUV or truck. Rivian, Ford, and other automakers have hiked EV prices this year due to rising demand and higher costs.
The battery criteria makes the equation more complicated. Bozzella said no models will meet those requirements in the first few years. He encourages Congress to adjust its approach, while other EV advocates say supply chains are already shifting away from Asia and automakers will adapt in enough time to benefit consumers before 2032, when the provisions expire.
There are 14 current and forthcoming vehicles that could qualify for the tax credits based on their price tag and assembly in North America, according to Consumer Reports:
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