{"id":38693,"date":"2022-12-21T00:04:25","date_gmt":"2022-12-21T05:04:25","guid":{"rendered":"https:\/\/autosector.com\/?p=38693"},"modified":"2022-12-21T00:04:25","modified_gmt":"2022-12-21T05:04:25","slug":"ev-tax-credit-battery-rule-delay","status":"publish","type":"post","link":"http:\/\/autosector.com\/?p=38693","title":{"rendered":"Tesla, GM \u2014 and their buyers \u2014 stand to benefit from EV tax credit rule delay – Autoblog"},"content":{"rendered":"

Big news out of the federal government could be a big boon for certain automakers.<\/p>\n

The\u00a0Treasury Department said yesterday<\/a>\u00a0it would delay releasing proposed guidance regarding the sourcing of EV batteries that are part of the Inflation Reduction Act\u2019s (IRA) new $7,500 EV tax credit.<\/p>\n

The IRA\u2019s rules regarding the EV tax credit require that $3,750 of the credit is only eligible if 40% of the value of the critical minerals in the battery have been\u00a0\u201cextracted or processed\u201d<\/a>\u00a0in the U.S., or a country with a U.S. free-trade agreement. The Treasury has delayed guidance for this requirement until March, instead of January 1, 2023.<\/p>\n

The other $3,750 portion of the credit is contingent on having 50% of the battery components built in North America. The IRA EV tax credit also requires that EVs are assembled in North America, along with pricing ($55,000 for cars and $80,000 for trucks<\/a>, SUVs) and income requirements to meet in order to receive the credits.<\/p>\n

The delay in the critical minerals guidance is a big deal for manufacturers like GM<\/a> (GM<\/a>) and Tesla (TSLA<\/a>), because they are going to be reinstated into the EV tax credit regime on January 1st. Under the prior rules of the EV tax credit, GM and Tesla were phased out of any credits because they had reached the overall sales threshold of 200,000 EVs sold for those credits.<\/p>\n

In addition, GM and Tesla were likely only going to receive half the tax credit due to the battery critical minerals requirement. The delay until at least March means for most of Q1 and possibly beyond, some of their EV offerings will be eligible for the full EV tax credit of $7,500, assuming the buyer has met the income requirements.<\/p>\n

GM and Tesla Vehicles that are eligible for the full tax credit include:<\/p>\n