Democratic Proposal Could Make 70% Of Electric Vehicles Ineligible For Tax Credit

U.S. Automakers expressed concern Friday that under a recent Democratic proposal, most EV models available for purchase in the United States would be ineligible for a $7500 tax credit.   

“As currently written, the material, component and assembly requirements in the Clean Vehicle Credit will immediately reduce (by a lot) the number of qualifying electric vehicles available to consumers for purchase with the tax credit,” John Bozzella, head of the Alliance for Automotive Innovation, wrote Friday.  

According to Bozzella, 70% of the 72 EVs available for purchase in the United States would “immediately become ineligible when the bill passes and none would qualify for the full credit when additional sourcing requirements go into effect.”

The Senate Climate Package tax credit, proposed by Democratic Senators Chuck Schumer and Joe Manchin, would raise the requirements for the percentage of battery components originating from North America, and after 2023, it would prohibit batteries made with any Chinese components, Reuters reported.