Virtually no EVs currently qualify for expanded tax credits.
, That last part is rather tricky for the burgeoning EV market here in the States. China is currently listed as a “foreign entity of concern” by the United States government, which would bar vehicles with materials imported from that country from these tax credits. The problem with that is the fact that China is currently responsible for over three-quarters of the world’s battery production. The U.S. currently only makes up around 8 percent of the total.
“The $7500 credit might exist on paper, but no vehicles will qualify for this purchase incentive over the next few years,” John Bozzella, president and CEO of Alliance for Automotive Innovation said . “That’s going to be a major setback to our collective target of 40-50 percent electric vehicle sales by 2030.”According to the Alliance for Automotive Innovation, more than 70 percent of the 72 electrified-vehicles for sale in the United States currently fall outside of the scope of these new regulations. Certain vehicles like the Tesla Model 3 are already built from a majority of U.S. or Canadian-sourced materials, and will have no trouble with meeting the restrictions.
The expansion of these EV tax credits, specifically the addition of the new used vehicle credit, were intended to incentivize the transition to EVs without punishing consumers with increased prices associated with the new machines. That said, the start of the EV era is going to be a transitionary one in more ways than one. If Congress is serious about pushing American suppliers on automakers, investing in the supply chain for those materials is going to be critical.
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