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Automakers say U.S. Senate bill will jeopardize 2030 EV targets

August 7, 202211:22 PM GMT+1Last Updated 9 hours ago



WASHINGTON, Aug 7 (Reuters) - A group representing General Motors (GM.N), Toyota Motor (7203.T), Volkswagen (VOWG_p.DE) and other major automakers said a $430 billion bill approved Sunday by the U.S. Senate will put achieving U.S. electric-vehicle adoption targets for 2030 in jeopardy.

"Unfortunately, the EV tax credit requirements will make most vehicles immediately ineligible for the incentive," said the Alliance for Automotive Innovation's chief executive, John Bozzella, adding the bill "will also jeopardize our collective target of 40-50% electric vehicle sales by 2030."

The group had warned Friday that most EV models would not qualify for a $7,500 tax credit for U.S. buyers under the bill.

To be eligible for the credit, vehicles must be assembled in North America, which would make some current EVs ineligible as soon as the bill takes effect.

The Senate bill imposes other restrictions to deter automakers from using Chinese-made materials by phasing in required percentages of North American-sourced battery components. After 2023, vehicles with batteries that have Chinese components could not receive the credit, while critical minerals also face limitations on sourcing.

Senator Joe Manchin, who pushed for the restrictions, said EVs should not depend on foreign supply chains while Senator Debbie Stabenow of Michigan said the credit is "unworkable."

The bill creates a $4,000 tax credit for used EVs. The package provides billions in new funding for EV production as well as $3 billion for the U.S. Postal Service to buy EVs and battery-charging equipment.

The new EV tax credits, which would expire in 2032, would be limited to trucks, vans and SUVs priced no more than $80,000 and cars up to $55,000. Families with adjusted gross incomes of up to $300,000 would be eligible.

The U.S. House aims to vote on the bill on Friday.

President Joe Biden in 2021 set a target for electric and plug-in electric vehicles to comprise half of new vehicle sales in 2030.

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Good, hopefully it means more production here and if not oh well no tax credit for you
Yeah, I see no need to subsidize other countries' auto industries. And I like that the subsidies are also price limited, to reduce subsidies for the rich.

I'm not so sure about the limits on materials sourcing. It would be nice to accomplish that, but I'm not sure how well we'll be able to make that happen.
 

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Sooo.... this means UNLIMITED tax credits (as long you qualify) until 2032? Even on used EV's?
The Alliance for Automotive Innovation claims that no EV currently produced for the U.S. market and sold new qualifies for the full tax credit proposed in the Inflation Reduction Act better known as the Income Reduction Act bill. Not sure if the same rules apply to used EV.

Of course, the ideal situation would be for any and all tax credits for the purchase of EV or installation of EVSE and related infrastructure to be reduced to "zero, zero, zero".

What If No EVs Qualify for the EV Tax Credit? It Could Happen.
 

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The Alliance for Automotive Innovation claims that no EV currently produced for the U.S. market and sold new qualifies for the full tax credit proposed in the Inflation Reduction Act better known as the Income Reduction Act bill. Not sure if the same rules apply to used EV.

Of course, the ideal situation would be for any and all tax credits for the purchase of EV or installation of EVSE and related infrastructure to be reduced to "zero, zero, zero".

What If No EVs Qualify for the EV Tax Credit? It Could Happen.
I think the "no US produced EV qualifying" is likely related to the materials sourcing aspect.

So, did the lawmakers just pass a bill claiming help, yet offering no help? That sounds about right.

Although this would be a potentially costly provision, that ends up costing nothing. That's not like them at all.
 

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The Alliance for Automotive Innovation claims that no EV currently produced for the U.S. market and sold new qualifies for the full tax credit proposed in the Inflation Reduction Act better known as the Income Reduction Act bill. Not sure if the same rules apply to used EV.

Of course, the ideal situation would be for any and all tax credits for the purchase of EV or installation of EVSE and related infrastructure to be reduced to "zero, zero, zero".

What If No EVs Qualify for the EV Tax Credit? It Could Happen.
Even if this article proves accurate, GM and Tesla benefit from the return of the tax credit to their vehicles. They just need to find a way to meet the new requirements within their line-ups.
 
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Even if this article proves accurate, GM and Tesla benefit from the return of the tax credit to their vehicles. They just need to find a way to meet the new requirements within their line-ups.
That's correct tripowergto about the new requirements, though getting GM and Tesla (soon to be joined by Toyota and Ford) to suck on the government teet even more than they already have isn't a "benefit".
 

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That's correct tripowergto about the new requirements, though getting GM and Tesla (soon to be joined by Toyota and Ford) to suck on the government teet even more than they already have isn't a "benefit".
Fair, lol. Yet, it does level the playing field for all the domestic EV automakers.
 

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So, the this law is written to spur domestic EV's but at the same time it seems like the current administration is trying to squash domestic mining of the materials...

I find the headline "Automakers say U.S. Senate bill will jeopardize 2030 EV targets " to be a head scratcher. How can it possibly jeopardize anything? Were they planning on this legislation all along? They knew about it 3 years ago? I'd think all their plans would've been around losing the $7,500 credit we've had in existence 10+ years as each manufacturer exceeds the total allowed.

I'm all for spurring domestic production and supply chains and leveling the playing field with foreign companies that get some unfair advantages from their own governments. But I question this legislation and how well anything was thought out and who was whispering in Hunter's ear.
 

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The way the current BAB LAW is written, passed last fall and now implemented, there is no way current EV's can meet any aspect of it. It absolutely has materials as part of the law. This is very unlike Obama's buy america act which was just stimulus money.
What I don't know is if this current BAB law applies to everything bought in the USA or just market segments. It appears to me that auto manufacturing is part of this new law. I do know it applies to my industry (infrastructure) and any project that has Fed money must currently meet 55% USA content. While I am all for this 'attempt', there is little to no USA manufacturing left that can meet these goals. If we doubled-tripled our foundry capacity, maybe, but we all know the EPA is the huge hurdle and why there is but a fraction of foundries left in the USA.
 

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I don't know, it seems like that ole double edged sword thing with this. :confused:They think they are trying to do the right thing, but the language and details are difficult to accomplish considering our current state of affairs. Dang Sad and Frustrating IMO :(:mad:.
 

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But I question this legislation and how well anything was thought out
As with any legislation predicated on perpetuating the globaloney warming hoax via tax credits for specific products and services, the Manchin-Schumer Income Reduction Act of 2022 is well "thought out" only in the sense of taking crony capitalism to a whole new level.

 

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The way the current BAB LAW is written, passed last fall and now implemented, there is no way current EV's can meet any aspect of it. It absolutely has materials as part of the law. This is very unlike Obama's buy america act which was just stimulus money.
What I don't know is if this current BAB law applies to everything bought in the USA or just market segments. It appears to me that auto manufacturing is part of this new law. I do know it applies to my industry (infrastructure) and any project that has Fed money must currently meet 55% USA content. While I am all for this 'attempt', there is little to no USA manufacturing left that can meet these goals. If we doubled-tripled our foundry capacity, maybe, but we all know the EPA is the huge hurdle and why there is but a fraction of foundries left in the USA.
That's along the lines of what I was saying, but it seems like the current administration is actively blocking any attempts to implement this. Kind of like this is legislation to help them look good for November, but they'll actually stab their own legislation in the back.

I want this to work, but, not to be political, I don't think liberals will allow their own legislation to get anywhere. I don't mean this as a shot to the liberal party but a legitimate question - I don't see the party values allowing for this unless there are crazy expensive restrictions and EPA regulations, in which case it becomes unaffordable to the masses and back to pointless. Or, is that what this credit is for? To offset the ultra high costs that they will impose on any actual American production?

This reminds me of all the recycling we do in Connecticut - I have a blue bin for paper/plastic/glass yet from what I hear it all ends up in a landfill as there's no place to take it. What's the point other than taking more time and money?
 

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As is typical of their 800+ page stuff, nobody's read it but it will create boo coo costs and restrictions and benefit a select few. But it's out there, so we'll see where the radioactive debris settles.

I'd guess this will just tie up the EV industry in some more knots of weird requirements and brainchildren of people who have never run a business, or worked in one. Happy landings!
 

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Discussion Starter · #18 ·
Not many American's seem to want BEV'as their next new car purchase. 70% want an ICE car.



EV range is not meeting expectations



Obviously need a bigger EV carrot, with wee bit more range as well.

July's plans

New Vehicle Credit
  1. Manufacturer caps eliminated. (Page 370, line 15)
  2. Credit applies for vehicles purchased beginning January 1, 2023. (Page 386, line 1).
  3. Transition provision for EVs with written sales orders dated in 2022 prior to the date of President signing the bill but delivered in 2023 allows purchaser to claim the “old” credit in 2023. (Page 386, line 20).
  4. Vehicle must be assembled in North America to qualify for new credit. (Page 366, line 15).
  5. North American assembly requirement applies to vehicles sold after the date of adoption of the bill. (Page 386, line 3)
  6. $7,500 credit is broke into two binary pieces meaning the vehicle either qualifies for each piece of the credit or it doesn’t. No longer based on size of battery. (Page 366, line 6)
  7. $3,750 of the new credit is based upon the vehicle having at least 40% of its battery critical minerals from the United States or countries with a free trade agreement with the United States. This is a list of countries with free trade agreements with the US.(Page 371)
  8. The other $3,750 of the new credit is based on at least 50% of the battery components of the vehicle coming from the United States or countries with a free trade agreement with the US. (Page 372, line 13)
  9. The 40% minerals requirement increases to 50% in 2024, 60% in 2025, 70% in 2026 and 80% in 2027. (page 371 line 23)
  10. The 50% battery components requirement increases to 60% in 2024, 70% in 2026, 80% in 2027, 90% in 2028 and 100% in 2029. (Page line 373)
  11. The government has until the end of the year to develop guidance on the battery requirements. (Page 374)
  12. Beginning in 2025, any vehicle with battery minerals or components from a foreign entity of concern are excluded from the tax credit. (Page 374, line 20).
  13. One credit per vehicle. (Page 375, line 12)
  14. Modified gross income limit of $150k for individuals, $225k for head of household, and $300k for joint returns. Definition of MAGI (page 375, line 22)
  15. MSRP of vehicle must be $80k or less for SUVs, Vans and Trucks. $55k for all other vehicles. (Page 377, line 4)
  16. Dealer can apply credit at time of sale. Dealer must disclose to buyer the MSRP of the vehicle, the applicable tax credit amount and the amount of any other available incentive applicable to the purchase. (Page 378, line 6)
  17. Credit terminates December 31, 2032.
Used Vehicle Credit
  1. Tax credit of 30% of value of used EV with $4,000 cap (Page 387, line 23).
  2. Used vehicle must be at least two model years old at time of sale. (Page 389, line 7).
  3. The original use of the vehicle must have occurred with an individual other than the one claiming the used tax credit. (Page 389, line 10).
  4. Used vehicle must be purchased from a dealer. (Page 390, line 3).
  5. Used vehicle price must be $25k or less. (Page 390, line 5).
  6. Used vehicle qualifies for tax credit only once in its lifetime. (Page 390, line 7)
  7. Purchaser must be an individual (no businesses) to qualify for used credit. (Page 390, line 14).
  8. Purchaser may only claim one used vehicle credit per three years. (Page 390, line 20).
  9. Modified gross income cap of $75k for individuals, $112,500 for head of household and $150k for joint returns. (Page 388).
  10. Credit may be applied at time of sale by dealer. (Page 391, line 15).
  11. Credit terminates on December 31, 2032. (Page 391, line 12).
 

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The new EV tax credits, which would expire in 2032, would be limited to trucks, vans and SUVs priced no more than $80,000 and cars up to $55,000.

So is this like CAFE, that basically incentivized companies to make "trucks"?

$60,000 Sedan EV = $0 tax credits; raise the body 3/4" and put a hatch on it, increase the price to $75,000 and it qualifies for the $7,500! Yeh! 🤡
 

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  1. Dealer can apply credit at time of sale. Dealer must disclose to buyer the MSRP of the vehicle, the applicable tax credit amount and the amount of any other available incentive applicable to the purchase. (Page 378, line 6)

This is an interesting change if any vehicle can actually meet all the other relentless criteria.
 
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