EVs are making sprinting strides these days as the switch is in full swing, however, many are still in the dark and left confused for various reasons, and among them are US car makers as well. As newer EVs are making their way to the market so are new rules and provisions and the new EV tax credit rules by Joe Biden leave US car makers in the dark.
Automakers are eagerly waiting to figure out which of their cars are eligible for the EV tax credit as per the US Treasury Department.
To make matters worse new rules were released on Friday where some information was provided but still, a few qualification parameters remained to be mentioned that would help people reach the figure of 7,500 dollars in tax credit.
With the new rules taking effect on April 18 the car makers have a short time and a huge collection of cars to sell till the incentive is valid. More vehicles are expected to be disqualified and also it is the carmakers who need to tell the Treasury under penalty of perjury which of their vehicles are eligible.
Mike Sullivan who owns a dealership in Los Angeles selling 15 different brands shared, We’ve already got a confused market. You’ve got enough discomfort with interest rates, gas prices, the ebb and flow of cars available. So when people go to look and talk, they’re getting mixed messages.
As per IRS’ most recent guidelines, twenty-one vehicle models qualify for full credits, however, several of these vehicles will be disqualified by the new rules or will be downgraded to offer partial credits only by 17th April. Before the Inflation Reduction Act became law, 72 models qualified for a full tax credit of 7,500 dollars.
A few automakers have reminded the people to take benefits of the tax credits now before they are gone.
Car makers like Tesla and General Motors Co. are still expected to partially benefit from new rules as they made big investments in domestic battery production even though they still rely on minerals that are mined in the countries which will be disqualified by future rules.
Even though new EV tax credit rules by Joe Biden leave US car makers in the dark even companies like Toyota Motor Corp. can benefit from it.
In the past, they have been criticized by environmentalists now and then for focusing on hybrids instead of EVs. However, with the new rules, they now get more time to match their competitors who would qualify for full tax credits in a short time otherwise.
Smaller tax credits won’t work out well for EVs as they won’t be as affordable. This will force the car makers to either cut down their prices or to fund the incentives from their pocket if they want to improve sales as per Benchmark Minerals’ consultant Manish Dua who is studying tax credit rules in New Delhi.
Source: Treasury Department