GREENS VS. ELECTRIC VEHICLE TAX CREDITS
Wall Street Journal
July 31, 2022
The Schumer-Manchin tax bill’s rich electric-vehicle subsidies are a boon for auto makers, but they come with a hitch: It’s unlikely any electric vehicle on the market today would qualify for the $7,500 tax credit because of conditions in the bill on material manufacturing. This will be one policy where Democratic promises of permitting reform meet the road.
The bill removes the current cap of 200,000 electric vehicles per manufacturer that can receive the credits and imposes an income limit of $225,000 for individuals. It also establishes a price limit to qualify for vans, SUVs and pickups ($80,000) and sedans ($55,000). What a relief that taxpayers won’t be subsidizing electric Porsches for millionaires.
But the biggest change is that the credit going forward will be contingent on where its battery materials are made. To qualify for $3,750 of the credit, an increasing share of a vehicle’s battery minerals such as lithium and nickel must be extracted or processed in the U.S. or in a country with which the U.S. has a free-trade agreement, starting at 40% in 2023 and increasing to 80% in 2027.
Read the full article here.