The Inflation Reduction Act of 2022 makes sweeping changes to the existingElectric CarWhile the new scheme covers a wider range of aspects, the tax deduction qualifications have also become more stringent;VehicleIndustry groups estimate that currently the U.S. Of the 72 electric, hydrogen or plug-in hybrid vehicles available in the U.S., approximately 50 do not qualify for the $7500 tax credit.
John Bozzella, chief executive of the Alliance for Automotive Innovation, an auto business group, said that the U.S. Of the 72 types of clean energy vehicles in the U.S., about 50 are not tax deductible. On paper only, new cars purchased in the next few years will not qualify.”
The industry group estimates that 70 percent of electric and plug-in hybrid vehicles currently eligible for tax relief will be ineligible by 2023 under strict rules in the new bill on batteries and selling prices.
with electric truckVacation“Nearly all of the company’s vehicles are not eligible for the incentive,” said James Chen, vice president of public policy at automaker Rivian, before the company introduces lower-priced models over the next few years.
For clean energy vehicles to qualify for the 7,500 yuan tax subsidy, the following conditions must be met: the retail price of ordinary vehicles should not exceed 55,000 yuan, while clean energy trucks, vans and SUVs cost 80,000 yuan. should not exceed New car buyers If the tax exemption is filed jointly, the annual income limit is 300,000 yuan, the annual income limit for car buyers is 225,000 yuan, and the annual income limit for individual car purchases is 150,000 yuan; Lastly, the new car must be assembled in North America, and the subsidy applies to vehicles manufactured after December 31st of this year.
Tighter battery restrictions for clean-energy vehicles from next year could mean that any electric vehicles won’t be taxable for years to come, unless manufacturers can adjust their selling prices, says North America. Cannot build an assembly plant in the U.S. and can’t find suitable new sources of battery material.
For electric vehicle batteries to be eligible, key materials must meet specific requirements. For example, lithium must be sourced from North America or imported from countries that have free trade agreements with the United States. Furthermore, the cost of lithium batteries could account for 40% of the total vehicle cost in 2023. Year over year up 10 percentage points to 80% in 2027.
According to the new bill, if key raw materials for batteries are imported from countries such as China and Russia, which the State Council has identified as “countries of particular concern”, they will be banned after 2025.
Non-mineralized battery components of electric vehicles must also be sourced from North America or free trade countries, and the cost ratio should increase from 50% in 2023 to 100% in 2029.