I think that’s a fair trade-off…as long as companies show a solid commitment to moving production here in the US or already have plans in the works to do so they should still qualify imo, as long as those plans aren’t 10+ years in the future.
I think similar waivers were done for foreign steel for those construction bills.
There’s an upside and downside if you’re in the market for an electric or plug-in hybrid electric vehicle.
The upside is that the newly enacted Inflation Reduction Act includes a wholly revamped tax credit for electric vehicles that starts in 2023 and continues through 2032.
The downside is that the credit, now called the “clean vehicle credit,” comes with many new restrictions.
The clean vehicle credit remains at a maximum of $7,500. But beginning in 2023, to qualify for the credit,
you will need an adjusted gross income of $300,000 or less for married filing jointly or $150,000 or less for singles; and
you will need to buy an electric vehicle with a manufacturer’s suggested retail price below $80,000 for vans, SUVs, and pickup trucks, or $55,000 for other vehicles.
But that’s not all. The 2023-and-later credit includes new domestic assembly and battery sourcing requirements.
The new law reduces or eliminates the credit when the vehicle fails the battery sourcing requirements. Currently, no electric vehicle will qualify for the full $7,500 credit. Manufacturers are working feverishly to change this, but it could take a few years.
The new credit eliminates the cap of 200,000 electric vehicles per manufacturer. Thus, popular electric vehicles manufactured by GM, Toyota, and Tesla are now available if they meet the price cap and other requirements.
And then, starting in 2024, you can qualify for a credit of up to $4,000 when purchasing a used electric vehicle from a dealer (not an individual). The income caps also will apply.
Also, starting in 2024, you’ll be able to transfer your tax credit to the dealer in return for a cash rebate or price reduction. This allows you to benefit immediately rather than waiting until you file your tax return.
If you’re income is too high or you wish to purchase a too-expensive electric vehicle, consider buying a qualifying electric vehicle (assembled in North America) on or before December 31, 2022.
If you buy an electric vehicle for business use in 2023, you have a second option: the commercial clean vehicle credit.
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This just means the dealer will have a new avenue to steal it.
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See also
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EV Blessings.
The domestic assembly requirement is already in effect.
The used ev credit has lower income caps
They really pulled out all the stops on this bill to make sure it qualifies the least amount of cars and individual taxpayers possible.
I don’t mind the income and price caps so much on the new side but why put handicap the limit to the extent they did on used? Just plain silly.
Fixed that for you.
He really didn’t want it and ensured it was nigh impossible to achieve
If he was negotiating in bad faith it’s because he knew those who he was negotiating with were also acting in bad faith.
At the end of the day, Chucky let it come to a vote so don’t think for a second he cared either.
He was desperate for a win, they had one before until Manchin stopped it good. The old one was much nicer.
You are implying that Schumer wanted this bill, he didn’t , but he wanted a win so bad that he was willing to accept this bill.
Desperation isn’t a good look. Oh well, onto the next rake to step on.
I believe the credit is split between battery minerals and components and the percentage is phased. I think some batteries already qualify as they are sourcing from Korea, a Free Trade country… it’s all the Chinese sourced batteries that are an issue.
As of right now, nothing qualifies since guidance defining how they determine the sourcing requirements is still pending.
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Here is another biggy people gloss over in the new legislation.
EV’s sold in US starting 2024 may not contain any battery components that were manufactured or assembled by a foreign entity of concern.
Foreign entity of concern = China (and some other countries)
So in theory a battery pack could be made in US, meet all mineral sourcing and component % minimums. But if one single component in the pack is from China it will not get any EV tax credit.
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Nobody is thinking that far ahead if we’re honest (they need a flow chart for 2022, and 2023 is at the Secretary’s mercy). But we’ve been at least contemplating this since before the IRA:
China isn’t a target simply because it’s China, but because most of the minerals used in EV batteries are imported to China and processed with forced labor. It’s one of the few bipartisan issues of this entire Congressional session. CATL announced in August that they were opening a battery plant there, though if CATL is on the UFLPA list it doesn’t matter how many plants they open around the world.
There could be any number of long term consequences. Not all of announced battery plants will actually open, forget on-time, or yield what they are expected to. I expect at least one to get stuck with an injunction or closed before it reaches capacity (save time and just build them on existing superfund sites).
We could very well see the timeline relaxed, it’s all speculation at this point
I didn’t read deep enough but you know how everyone started doing “binding contract agreements” prior to 8/16 to beat some of the new restrictions/requirements, can the same be done prior to 1/1/23 to get around the income, MSRP, and battery requirements?
Like for people who have orders for a 2023 Mach-E but it arrives in January… can they still get the 2022 Fed credit without the income cap?
No. Pre 8/16 only.
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I can’t believe there is no request for comments on the transition rule.
That aside, the request for comments highlights something I hadn’t noticed before. Qualification is by “value.” If the regulations were to permit it, every manufacturer could qualify for the minerals and battery minimums by overpaying for trade partner/North American components (e.g., 99% Chinese parts, 1% qualifying part that costs at least two-thirds the price of the rest of the parts).
Since every manufacturer wants trade partner/North American components, it wouldn’t even really be a stretch to say supply and demand justify exorbitant prices for the qualifying components.
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I see there is request for clarify on the definition of “foreign entity of concern”.
Documentation of countries of concern(I am sure there is a more recent list):
" The most recent Countries of Particular Concern designations were made by the Secretary of State on November 15, 2021:
Burma, People’s Republic of China, Eritrea, Iran, the Democratic People’s Republic of Korea, Pakistan, Russia, Saudi Arabia, Tajikistan, and Turkmenistan."