Volkswagen, BMW, Nissan, Rivian, Hyundai and Volvo Cars will lose a $7,500 tax credit for electric vehicles under new battery purchase rules, the U.S. Treasury Department said on Monday. The new requirement, which took effect Tuesday, also halved the credit to $3,750 for Tesla Inc.’s Model 3 Standard Range Rear Wheel Drive, but would retain the full $7,500 credit for other Tesla models, the Treasury Department said.
Vehicles that lost points on Tuesday included the BMW 330e, BMW X5 xDrive45e, Genesis Electrified GV70, Nissan Leaf, Rivian R1S and R1T, Volkswagen ID.4 and the plug-in hybrid Audi Q5 TFSI e Quattro and plug-in hybrid ( PHEV) Volvo S60. The Swedish automaker is 82 percent owned by China’s Zhejiang Geely Holding Group.
The rules are aimed at weaning the U.S. off China’s reliance on China’s electric vehicle battery supply chain and are part of President Joe Biden’s push to have electric vehicles or plug-in hybrids account for 50 percent of new U.S. car sales by 2030.
In a statement, Hyundai Motor Co. said it was committed to its long-term EV plans and “will use key provisions in the Reducing Inflation Act to accelerate the transition to electrification.”
VW said it was “pretty optimistic” the ID.4 SUV would qualify for the tax credit. “We are waiting for the supplier to provide the appropriate documentation to determine its eligibility for the credit,” the German automaker said.
Nissan said it “is working closely with our suppliers to hope that the Leaf will be eligible for at least some of the credits in the future.”
Volvo Cars said it was reviewing the recently issued EPA rule and supported the Biden administration’s push to lower tailpipe emissions, but said the best way to achieve that was through “uniform regulations (or a national program).”
Rivian and BMW declined to comment, and Tesla did not respond to a request for comment.
Treasury also revealed that GM’s electric Chevrolet Bolt and Bolt EUV will qualify for the full $7,500 tax credit.
GM earlier said it expects at least some electric vehicles to qualify for the $7,500 tax credit under the new rules, including the 2023 Cadillac Lyriq and the upcoming Chevrolet Equinox EV SUV and Blazer EV SUV. All GM EVs are eligible, the Treasury Department said.
Earlier, Stellantis NV, the parent company of Ford Motor Co. and Chrysler Corp., said their tax credit for most electric and PHEV models would be halved to $3,750 on April 18. The Treasury Department confirmed the automaker’s calculations.
The rules were announced last month and authorized by Congress in August as part of the $430 billion Inflation Reduction Act (IRA).
The IRA requires 50% of the value of battery components to be produced or assembled in North America to qualify for the $3,750 credit, and 40% of the value of critical minerals must be sourced from the US or a free trade partner to qualify for the $3,750 credit.
The law, enacted in August to require vehicles assembled in North America to qualify for any tax credit, eliminated nearly 70 percent of eligible models at the time. On January 1, new price caps and buyer income limits went into effect.
Last week, the Environmental Protection Agency proposed new emissions rules, predicting that 60 percent of new car sales by 2030 will be electric.
The Treasury Department said in December that electric vehicles not eligible for the $7,500 consumer tax credit may qualify for the $7,500 commercial lease credit.
First published date: April 18, 2023 at 08:26 AM CST
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