Buyers of most electric vehicle models would not qualify for the $ 7,500 tax credit as proposed by the Democrats in the US Senate.
That’s according to a group of major car makers.
Car makers are privately concerned about the proposal’s requirements for vehicle batteries and the content of critical minerals to be sourced from the United States.
According to John Bozzelli, head of Alliance for Automotive Innovation, a July 27 proposal by Senators Chuck Schumer and Joe Manchin will make 70% of America’s electric, hybrid and fuel cell electric vehicles ineligible.
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The group represents, inter alia, General Motors, Toyota Motor and Ford Motor.
“No one would qualify for full credit when additional sourcing requirements take effect,” he said.
Car makers want significant changes to the proposal, which is part of a larger drug, energy and tax bill.
Without the tax break, vehicles become more expensive for US consumers.
President Biden aims to ensure that by 2030, half of all new vehicles sold are electric or plug-in hybrid models.
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An analysis conducted on Wednesday by the Congressional Budget Office suggested that only 11,000 new electric vehicles would benefit from the loan in 2023.
Manchin’s and Schumer’s offices did not comment immediately. The Senate could vote on the bill on Saturday.
The bill includes increasing requirements on the percentage of North American battery components based on value. After 2023, it would prohibit the use of the battery with any Chinese components.
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The group would prefer a more gradual introduction of battery components, critical mineral requirements and final assembly.
Reuters contributed to this report.