Creative Commons

Creative Commons

A group representing General Motors, Toyota Motor, Volkswagen and other major automakers purport that a $430 billion bill approved Sunday by the U.S. Senate will put the brakes on achieving U.S. electric-vehicle adoption targets for 2030.

"Unfortunately, the EV tax credit requirements will make most vehicles immediately ineligible for the incentive," said the Alliance for Automotive Innovation's chief executive, John Bozzella. He noted the bill also would jeopardize the collective target of 40-50% electric vehicle sales by 2030.

The group warned legislators before the bill passed that most EV models would not qualify for a $7,500 tax credit for U.S. buyers under the legislation.

The bill allows credits for vehicles assembled in North America, which makes some EVs ineligible for the credit.

The Senate bill also imposes other restrictions to deter automakers from using Chinese-made materials by requiring automakers to use more North American-sourced battery components in a phased process. Vehicles with batteries having Chinese components will not the credit after 2023.

Sen. Joe Manchin, who pushed for the restrictions, said EVs should not depend on foreign supply chains while Sen. Debbie Stabenow of Michigan said the credit is "unworkable." 

Used EVs are eligible for a $4,000 tax credit. The package also provides billions in new funding for EV production as well as $3 billion for the U.S. Postal Service to buy EVs and battery-charging equipment.

The new EV tax credits will expire in 2032. As they stand, they are limited to trucks, vans and SUVs under $80,000 and cars up to $55,000. Only families with adjusted grows incomes of up to $300,000 will be eligible.

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