Leroy N. Soetoro
2022-08-09 17:45:36 UTC
There is no grace period, so credits effectively end once the bill is
signed.
https://arstechnica.com/cars/2022/08/its-possible-no-electric-vehicles-
will-qualify-for-the-new-tax-credit/
The Inflation Reduction Act of 2022 passed the United States Senate on
Sunday and heads to the House of Representatives, where it is expected to
pass easily. It contains numerous changes to the tax code, meant in large
part to prevent the worst effects of climate change.
Among these is a revision to the existing tax credit for new plug-in
electric vehicles. As we detailed last week, the IRA introduces income
caps for the tax credit, and it will only apply to sedans that cost less
than $55,000 and other EVs that cost less than $80,000. The bill also
drops the 200,000 vehicle-per-OEM cap on the tax credit, which would
benefit both General Motors and Tesla.
At least it will if their EV batteries are mostly made within North
America, with at least 40 percent of the materials used having been
extracted and processed within North America or a country with a free
trade agreement. Now, instead of being based on battery capacity, half the
credit ($3,750) is tied to where the pack is made, and the other half its
supply chain. And that will be a problem if you're looking to buy an EV in
2023.
Automakers and battery companies are starting to build factories in North
America. In addition to Tesla's Nevada site, GM and LG Chem are building
batteries in Ohio, with Ford and Volkswagen using SK cells made in
Georgia. More plants are in the works: Ford and SK are building plants in
Kentucky and Tennessee, to name a couple, with US battery plants also in
the works at Stellantis and Volkswagen, among others. So some EVs may
qualify for at least half the full $7,500 credit, depending upon how the
value of the battery is determined.
"Ultimately, a lot will also depend on guidance that will have to be
issued by IRS. At first glance, it appears that almost no cars will
qualify, but some might end up squeaking in," Sam Abuelsamid, principal
research analyst at Guidehouse Insights, told Ars. Without knowing more,
it's impossible to be definitive about which EVs will qualify for at least
$3,750, but the list may include the Ford Mustang Mach-E, the locally
produced Volkswagen ID.4s, GM EVs that use its new Ultium cells, and
Teslas that use cells from Nevada.
But it's probably more straightforward regarding the other half of the
credit. Even if these domestic battery plants increase the US's share of
battery manufacturing, at least 40 percent of the critical chemicals that
go into those cells must be extracted and processed locally, a percentage
which will escalate by 10 percent each year.
Right now, North America doesn't have the ability to handle that
productionabout two-thirds of the world's lithium, much of its cobalt,
and almost all its graphite are processed in China.
Domestic recycling of lithium-ion batteries will provide one local source
of battery materials, and the US contains lithium deposits that have yet
to be exploited. Automakers like GM were already trying to source as much
as possible locally, but globally there's a race to secure contracts for
future production, which might limit their choices.
Once the bill has been signed into law by President Biden, it's up to the
Secretary of Transportation Pete Buttigieg to issue guidance on how the
new rules will be interpreted. That includes how one's income will be
determined in the case of a point-of-sale rebate and the manufacturing
value of a battery.
That has to happen no later than the end of 2022, and there is no grace
period once the guidance is issued. But if you have a binding contract to
buy a new EV by the time the law is passed, but hasn't been delivered yet,
it should still qualify for the old tax credit.
"The manufacturing tax credits and grant funding will help accelerate the
domestic industrial base conversion currently underway. Unfortunately, the
EV tax credit requirements will make most vehicles immediately ineligible
for the incentive. That's a missed opportunity at a crucial time and a
change that will surprise and disappoint customers in the market for a new
vehicle. It will also jeopardize our collective target of 40-50 percent
electric vehicle sales by 2030," said John Bozzella, president and CEO of
the Alliance for Automotive Innovation.
--
"LOCKDOWN", left-wing COVID fearmongering. 95% of COVID infections
recover with no after effects.
No collusion - Special Counsel Robert Swan Mueller III, March 2019.
Officially made Nancy Pelosi a two-time impeachment loser.
Donald J. Trump, cheated out of a second term by fraudulent "mail-in"
ballots. Report voter fraud: ***@mail.house.gov
Thank you for cleaning up the disaster of the 2008-2017 Obama / Biden
fiasco, President Trump.
Under Barack Obama's leadership, the United States of America became the
The World According To Garp. Obama sold out heterosexuals for Hollywood
queer liberal democrat donors.
President Trump boosted the economy, reduced illegal invasions, appointed
dozens of judges and three SCOTUS justices.
signed.
https://arstechnica.com/cars/2022/08/its-possible-no-electric-vehicles-
will-qualify-for-the-new-tax-credit/
The Inflation Reduction Act of 2022 passed the United States Senate on
Sunday and heads to the House of Representatives, where it is expected to
pass easily. It contains numerous changes to the tax code, meant in large
part to prevent the worst effects of climate change.
Among these is a revision to the existing tax credit for new plug-in
electric vehicles. As we detailed last week, the IRA introduces income
caps for the tax credit, and it will only apply to sedans that cost less
than $55,000 and other EVs that cost less than $80,000. The bill also
drops the 200,000 vehicle-per-OEM cap on the tax credit, which would
benefit both General Motors and Tesla.
At least it will if their EV batteries are mostly made within North
America, with at least 40 percent of the materials used having been
extracted and processed within North America or a country with a free
trade agreement. Now, instead of being based on battery capacity, half the
credit ($3,750) is tied to where the pack is made, and the other half its
supply chain. And that will be a problem if you're looking to buy an EV in
2023.
Automakers and battery companies are starting to build factories in North
America. In addition to Tesla's Nevada site, GM and LG Chem are building
batteries in Ohio, with Ford and Volkswagen using SK cells made in
Georgia. More plants are in the works: Ford and SK are building plants in
Kentucky and Tennessee, to name a couple, with US battery plants also in
the works at Stellantis and Volkswagen, among others. So some EVs may
qualify for at least half the full $7,500 credit, depending upon how the
value of the battery is determined.
"Ultimately, a lot will also depend on guidance that will have to be
issued by IRS. At first glance, it appears that almost no cars will
qualify, but some might end up squeaking in," Sam Abuelsamid, principal
research analyst at Guidehouse Insights, told Ars. Without knowing more,
it's impossible to be definitive about which EVs will qualify for at least
$3,750, but the list may include the Ford Mustang Mach-E, the locally
produced Volkswagen ID.4s, GM EVs that use its new Ultium cells, and
Teslas that use cells from Nevada.
But it's probably more straightforward regarding the other half of the
credit. Even if these domestic battery plants increase the US's share of
battery manufacturing, at least 40 percent of the critical chemicals that
go into those cells must be extracted and processed locally, a percentage
which will escalate by 10 percent each year.
Right now, North America doesn't have the ability to handle that
productionabout two-thirds of the world's lithium, much of its cobalt,
and almost all its graphite are processed in China.
Domestic recycling of lithium-ion batteries will provide one local source
of battery materials, and the US contains lithium deposits that have yet
to be exploited. Automakers like GM were already trying to source as much
as possible locally, but globally there's a race to secure contracts for
future production, which might limit their choices.
Once the bill has been signed into law by President Biden, it's up to the
Secretary of Transportation Pete Buttigieg to issue guidance on how the
new rules will be interpreted. That includes how one's income will be
determined in the case of a point-of-sale rebate and the manufacturing
value of a battery.
That has to happen no later than the end of 2022, and there is no grace
period once the guidance is issued. But if you have a binding contract to
buy a new EV by the time the law is passed, but hasn't been delivered yet,
it should still qualify for the old tax credit.
"The manufacturing tax credits and grant funding will help accelerate the
domestic industrial base conversion currently underway. Unfortunately, the
EV tax credit requirements will make most vehicles immediately ineligible
for the incentive. That's a missed opportunity at a crucial time and a
change that will surprise and disappoint customers in the market for a new
vehicle. It will also jeopardize our collective target of 40-50 percent
electric vehicle sales by 2030," said John Bozzella, president and CEO of
the Alliance for Automotive Innovation.
--
"LOCKDOWN", left-wing COVID fearmongering. 95% of COVID infections
recover with no after effects.
No collusion - Special Counsel Robert Swan Mueller III, March 2019.
Officially made Nancy Pelosi a two-time impeachment loser.
Donald J. Trump, cheated out of a second term by fraudulent "mail-in"
ballots. Report voter fraud: ***@mail.house.gov
Thank you for cleaning up the disaster of the 2008-2017 Obama / Biden
fiasco, President Trump.
Under Barack Obama's leadership, the United States of America became the
The World According To Garp. Obama sold out heterosexuals for Hollywood
queer liberal democrat donors.
President Trump boosted the economy, reduced illegal invasions, appointed
dozens of judges and three SCOTUS justices.