In 2024, Americans will have fewer options when it comes to shopping for electric and plug-in hybrid cars with tax incentives. In fact, as a result of the new rules of origin established by the Inflation Reduction Act, many electrified cars have lost eligibility for tax credits up to $7,500. The “accusation” of the delivery battery was conducted outside the US.
USA: ELECTRICITY AND OUTLET TROUBLESHOOTING SUBJECT TO TERRITORIAL RESTRICTIONS
The United States adopted an auto incentive plan under the Biden administration that has a dual purpose: to promote the electrification of the industry and to promote national vehicle production. However, the incentives are subject to the so-called territorial restrictions,” which means that to qualify for the $7,500 tax credit, the car must be manufactured, and some key components (such as batteries) must be located in the USA or at most in one of the countries with which the Americans have a free trade agreement. These restrictions, which have received accusations of protectionism from many quarters, including Europe, were created with the clear aim of undermining China’s dominance of the component supply chain.
Specifically, the original rule requires that 40% of the metals contained in the battery of the electrified vehicle originate from North America or a free trade agreement country (or originate 100% from recycling activities conducted in North America) and that 50% of the value of the battery components is also produced in the same places. The two reference percentages will gradually increase to 80% for metals in 2027 and 100% for components in 2029.
AUTOMATIC INCENTIVES IN THE US: WHICH VEHICLES CAN ACCESS THE TAX CREDIT?
Well, based on the requirements in terms of supply of raw materials and batteries, which, thanks to the progressive effect, in 2024 became even more serious The US Department of the Treasury issued a news release list of models that can use tax incentives starting January 1 of this year, reducing their number from 43 on the previous list to just 19. But that’s not all: the Treasury itself said that some manufacturers still have to provide the necessary vehicle information, which could lead to new exemptions.
Let’s take a look at which cars were “saved” from the US Treasury’s chopping block, but considering that access to the tax credit is subject to another limitation, namely the list price of the car, which cannot exceed $80,000 + VAT for SUVs and pick- oops and $55,000+VAT for sedans or estates. These 19 “incentive” cars are:
- Chevrolet Bolt EUV
- Chevrolet Bolt EV
- Ford F-150 Lightning Extended
- Standard Series Ford F-150 Lightning
- Rivian R1S Dual Large
- Rivian R1S Quad Large
- Rivian R1T Dual Large
- Rivian R1T Dual Max
- Rivian R1T Quad Large
- Tesla Model 3 Performance
- Model Tesla
- Tesla Model Y AWD
- Tesla Model Y Performance
- Tesla Model Y RWD
- Chrysler Pacifica plug-in hybrid
- Plug-in hybrid Ford Escape
- Jeep Grand Cherokee plug-in hybrid
- Jeep Wrangler plug-in hybrid
- Plug-in hybrid Lincoln Corsair Grand Touring.
US 2024 INCENTIVES: CARS EXCLUDED
Faced with such a short list, the list excellent exclusion: Volkswagen ID.4, Tesla Model 3 Long Range AWD, BMW X5 xDrive50e, Audi Q5 Phev 55, Cadillac Lyriq, Ford E-Transit, Nissan Leaf, Tesla Cyber truck AWD and Chevrolet Blazer EV are no longer eligible US car incentives. however Volkswagen announced that it expects to qualify for the federal EV tax credit as early as January 2024, specifically for all ID.4 my 2023, and my 2024 models. Tesla announced that the Cyber Truck will likely qualify for a federal tax credit later this year Nissan is working with suppliers to get the OK for the Leaf.
