WASHINGTON – Many electric vehicles (EVs) lost eligibility for tax credits of up to US$7,500 (S$9,900) after new battery sourcing rules took effect on Jan 1, including the Nissan Leaf, Tesla Cybertruck All-Wheel Drive, some Tesla Model 3s and Chevrolet Blazer EV, the US Treasury said.
The United States Treasury issued guidelines in December detailing new battery sourcing requirements aimed at weaning the US EV supply chain away from China.
The number of EV models qualifying for US EV tax credits fell from 43 to 19. Those figures include different versions of the same vehicle type. The Treasury said some manufacturers have yet to submit information on eligible vehicles, which could lead to changes in the list.
Tesla did not immediately comment on Jan 1, but said on its website: “Cybertruck is likely to qualify for the federal tax credit later in 2024.”
The new rules allow buyers to claim the tax credit of up to US$7,500 at a participating dealership at the point of sale. To qualify for the tax credit, there are limits on vehicle price and buyer income.
The Volkswagen ID.4, Tesla Model 3 Rear Wheel Drive, BMW X5 xDrive50e, Audi Q5 PHEV 55, Cadillac Lyriq and Ford E-Transit are among the vehicles that fell off the list of those eligible for tax credits.
Volkswagen said on Jan 1 that it “is in the process of confirming eligibility for a federal EV tax credit for vehicles” after Jan 1.
“We are optimistic that MY2023 ID.4s and all MY2024 ID.4s will be eligible under the new rules,” Volkswagen added.
BMW did not comment immediately.
Nissan said it is working with suppliers in an effort to meet changing requirements “and regain tax credit eligibility for the Nissan Leaf in the future”.
The Treasury said: “Automakers are adjusting their supply chains to ensure buyers continue to be eligible for the new clean vehicle credit, partnering with allies and bringing jobs and investment back to the United States.”
Ford Motor said in December its E-Transit would lose the US$3,750 tax credit, as would the Mach-E and Lincoln Aviator Grand Touring plug-in hybrid, but its F-150 EV Lightning and the Lincoln Corsair Grand Touring retained credits.
General Motors noted that all of its EVs would temporarily lose eligibility except the Chevrolet Bolt, adding that the Lyriq and Blazer EVs are losing the credit because of two minor components.
The company expects that after a sourcing change, the Lyriq and Blazer EVs will regain eligibility in early 2024, and said its Chevrolet Equinox EV, Chevrolet Silverado EV, GMC Sierra EV and Cadillac OPTIQ produced “after the sourcing change will be eligible for the full incentive”.
The 2022 Inflation Reduction Act reformed the EV tax credit, requiring vehicles to be assembled in North America to qualify for any tax credits, eliminating nearly 70 per cent of eligible models at the time.
Tesla disclosed in December that its Model 3 Rear-Wheel Drive and Long Range vehicles would lose federal tax credits starting Jan 1. The Model 3 Performance retains the US$7,500 credit. REUTERS
