The United States Treasury on Monday said new regulations for battery sourcing will cause several electric vehicle models, including those made by Volkswagen, BMW, Nissan, Rivian, Hyundai, and Volvo Cars, to lose access to a $7,500 tax credit.
The regulations which require automakers to use domestically made battery cells if they want to claim the full $7,500 tax credit for their electric vehicles will be effective from Tuesday.
According to Reuters, it will
also reduce the credit for Tesla’s Model 3 Standard Range Rear Wheel Drive to $3,750 but maintain the full $7,500 credit for other Tesla models.
It was reported that the change affects the BMW 330e, BMW X5 xDrive45e, Genesis Electrified GV70, Nissan Leaf, Rivian R1S and R1T, Volkswagen ID.4, Audi Q5 TFSI e Quattro, and Volvo S60.
The purpose of these new regulations is to lessen the US’s reliance on China for EV battery supply chains and to achieve President Joe Biden’s goal of making 50% of US new vehicle sales by 2030 electric or plug-in hybrids.
In response, Hyundai Motor released a statement stating that it would use key provisions in the Inflation Reduction Act to speed up its electrification transition and remain committed to its long-range EV plans.
“It will utilize key provisions in the Inflation Reduction Act to accelerate the transition to electrification,” Hyundai said.
German automaker Volkswagen expressed confidence that its ID.4 SUV would be eligible for the tax credit, stating that it was “fairly optimistic” about the matter.
However, VW added that it was awaiting proper documentation from one of its suppliers to make a final determination about the vehicle’s eligibility.
Meanwhile, Nissan Motor Co. is hopeful that its Leaf model will at least qualify for partial credit in the future, stating that the company was “working closely with our suppliers.”
Volvo Cars released a statement acknowledging the Biden administration’s push for lower tailpipe emissions and stating that it supports recently released EPA rules.
However, the Swedish carmaker also argued that the best way to achieve this goal was through “aligned regulations (or one national program).”
It noted that it was reviewing the new rules but did not comment on whether its electric vehicles would be affected.
In contrast, Rivian and BMW declined to comment on the new regulations, while Tesla did not respond to requests for comment.
However, the US Treasury confirmed that General Motors Co.’s Chevrolet Bolt and Bolt EUV would qualify for the full $7,500 tax credit.
The United States government provides a tax credit of up to $7,500 for the purchase of electric vehicles to incentivize consumers to switch to more environmentally friendly cars.
However, this tax credit is not only limited to consumers. Auto manufacturers can also qualify for the credit if their vehicles meet certain criteria.
