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Does the EV tax credit price cap add urgency to the emergence of affordable models?

The price cap that includes the proposed revised federal EV tax credit could put pressure on automakers to produce more affordable electric vehicle models, argues one Bloomberg report.

One credit extension $7,500 supposedly has a good chance of moving through the Senate. In its current form, the law would add a $55,000 price cap for cars and $80,000 for pickup trucks and SUVs.

Along with income limits, these rules are meant to ensure the credits reach consumers who really need them, fairly affluent buyers who won’t have trouble buying an EV without them. But rising new car prices mean a large portion of consumers may not be able to take advantage of the credit, the report argues.

2023 Rivian R1S

2023 Rivian R1S

The average transaction price of a new electric vehicle was $66,997 in June, up 14 percent from a year earlier, according to Kelley Blue Book, compared with the market average of $48,043 (up 13 percent). %), the current electric vehicle price is a remarkable point. . While supply chain issues have affected the entire auto industry, analysts are particularly concerned about rising raw material costs for EV batteries.

So there’s a potential dilemma of trying to save funds for consumers who really need credit without cutting too many cars — some of which are American-built electric cars.

Sure, fewer Rivian trucks will qualify — especially after recent price increase up to $12,000. There are also currently no versions of the Lucid Air available to order. The cheapest Air Pure starts at around $87,400. Both these companies are American companies that have invested heavily in setting up production facilities in the US

Introduction of Chevrolet Equinox EV 2024

Introduction of Chevrolet Equinox EV 2024

However, base versions of the Tesla Model 3 and Model Y – the two most popular electric vehicles in the US – will remain eligible despite recent price increases, the report notes. And other automakers have promised more affordable EVs.

Toyota has indicated that it wants to make affordability and value, not range, a key part of its EV game. General Motors is also getting ready Chevrolet Equinox EVwill start at around $30,000 and discount only on Chevy Bolt EV and EUV.

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