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Automakers say 70% of electric vehicles won’t qualify for tax credits under Senate bill

WASHINGTON — Most electric vehicle models will not be eligible for a $7,500 tax credit for US buyers under a proposal by Democrats in the US Senate, a group of major automakers said. on Friday.

Automakers have expressed their own concerns about the proposal’s growing requirements for vehicles’ the battery and important mineral content sourced from the United States.

John Bozzella, head of the Alliance for Automotive Innovation represents Synthetic engine, Toyotaand Fordamong others, said the July 27 proposal by Senators Chuck Schumer and Joe Manchin would make 70% of the 72 total U.S. electric vehicles, dip into the mixture and fuel cell EVs do not qualify when passing.

“No one is eligible for full credit when the additional sourcing requirements go into effect,” he said.

The automakers want significant changes to the proposal, part of a larger drug, energy and tax pricing bill.

Without the tax credit, transportation would become more expensive for American consumers, and this could affect demand and sales. It can also slow down progress President Joe Biden’s goal has half of all new vehicle sold as electric or plug-in hybrid models by 2030.

An analysis by the Congressional Budget Office on Wednesday found that only 11,000 new electric vehicles will take the credit by 2023.

Manchin and Schumer’s office did not immediately respond to requests for comment. The Senate could vote as soon as Saturday on the bill.

“I don’t believe we should build a shipping method based on the support of foreign supply chains,” Manchin said on Tuesday.

The bill includes increased requirements for the percentage of battery components sourced from North America based on value. After 2023, it will not allow the use of batteries with any Chinese components.

Bozzella writes: “The gradual process of perfecting key battery components, minerals, and final assembly requirements – better reflecting geopolitics, sourcing and mining realities – will preserve credibility. for millions of Americans”.

Automakers want to expand the countries that can supply batteries, battery components and key minerals to include NATO members, Japan and others.

The new EV tax credits, which expire at the end of 2032, will be limited to trucktrucks and SUVs with a suggested retail price of no more than $80,000 and car has a price no more than $55,000. They will be limited to families with adjusted gross income up to $300,000 annually.

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