Automakers Feel EV Tax Credit Proposal Is Too Restrictive
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A lobby of domestic and foreign automakers is challenging the recent EV tax credit plan proposed by Senators Chuck Schumer and Joe Manchin on the grounds the bill is too restrictive with regard to battery sourcing and maximum vehicle price limits.
Provisions in the proposed EX tax credit bill would require automakers to meet rising requirements for the percentage of battery materials and components sourced from North American suppliers by 2023. Additionally, EVs with battery materials sourced from Chinese suppliers would be excluded from receiving purchase incentives after 2023.
Automakers feel the timeline to meet these provisions is not possible given the limited infrastructure that exists in North America for battery materials mining, processing and production.
A statement released by GM Wednesday said that while “some of the provisions are challenging and cannot be achieved overnight,” the automaker is “confident that the significant investments we are making in manufacturing, infrastructure and supply chain along with the timely deployment of complementary policies can establish the U.S. as a global leader in electrification today, and into the future.”
“We will continue to review the details and we look forward to engaging all stakeholders and working collaboratively on these important issues,” GM added.
American EV startup Rivian echoed GM’s sentiment, saying the “final package must extend the transition period,” for battery materials sourcing. Rivian also challenged the purchase price limits, which set an MSRP price cap of $80,000 for trucks, vans and SUVs and a cap of $55,000 for passenger cars.
Manchin is apprehensive to remove the provisions for battery materials sourcing, saying: “I don’t believe that we should be building a transportation mode on the backs of foreign supply chains, ” as quoted by Reuters.
Manchin and Schumer’s bill proposes a $7,500 purchase incentive for qualified EVs, the removal of the 200,000 vehicle manufacturer credit cap and a $4,000 incentive for used EVs. He encouraged automakers to “get aggressive,” to meet the provisions in the bill and “make sure that we’re extracting in North America, we’re processing in North America and we put a line on China.”
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It should be restrictive.
You are trying to support American Jobs as much as possible to Save the Big Three from Demise and to shift to BEV’s as quickly as possible while assisting the Consumers that actually could really use the Rebates. If you buy a Hummer, Rivian, or Tesla Model S you DO NOT need rebates.
My biggest Gripe is that they offer them on PHEV’s which is beyone Idiotic and completely defeats the So called Purpose of Shifting to BEV’s
No ultra luxury EV should be getting a rebate. 80k limit is already pretty high.
I hope there are income limits too. No family making 150k NEEDS a rebate.
The only reason PHEVs are on the list is because they they have about 30-60 miles of EV range, which is respectable for daily commutes. Some drivers never use the engine at all for months (I’ve read some drivers never used gasoline in their PHEV for over a year but that damaged vehicle components).
Richard P:
Another BIG BENEFIT of Plug-in Hybrids is that they are much much easier on the electrical grid – and the overnight charging that slowly takes place every day actually makes Central Stations last longer – due to smoothing out the loading of the ‘grid’ compared to what it was the day before.
Electric car people don’t like to admit it – but unless FAST CHARGING locations have Batteries on Site to lower their demand charges – they are a difficult load for the ‘grid’ to supply..
PHEVs don’t fast charge since they have the ICE backup.
That is why all EV fast charging locations should (as most already are) pay their fair share of electricity demand charges as requested by the serving utility and not attempt to get unfairly low rates – which would be just spread across other drivers who never asked if they wanted an electric bill increase at home.
In NY State where I am – the proposal for ‘free demand charges’ for fast chargers thankfully has died in committee.
You are right in that rebates on PHEVs is like spending money on the band-aid. They should apply those $$$ toward the charging infrastructure so we wouldn’t need PHEVs.
As a PHEV user, I don’t have the faith in our charging infrastructure to load my family in an EV on a cold winter day for a physician appointment 200+ miles away.
But I do drive Weeks/months at a time without using gasoline. I would love to switch to an EV!
I guess they can write all the restrictions into these bills they want. They just don’t seem to understand that designing, proving, booking and producing some items doesn’t happen as fast at they give speeches. Or change their tune.
“Even though we are making more money then ever and you want to pay customers to buy our vehicles so we get full price, it will cost us some money to create American jobs so that’s not fair”.
Uh, really? Are you sure you want to use that excuse?
They know many of these automakers can’t meet the rules – especially companies like Stellantis that has already built supply chains in Asia. It sounds like the real purpose behind the rules is to reduce the amount of credits that the government is obligated to give.
Why are we even discussing this? As far as I know not a single model of EV does NOT have a backlog. You give incentives to convince people to buy something. At the moment, that is not the problem. Supply < demand. Just STUPID. All they are doing is raising prices by the incentive and the car maker collects it as profit.
@mkavt
Because the Automakers need a lot of assistance to offer Great BEV’s at regular prices the average Consumer can afford. The so Called 20K – 35K vehicles. Those are just not available as of yet.
I understand that the Bolt exists but that Tech is literally from 10 years ago and is just NOT good enough.
This will allow Automakers to start offering vehicles in that Price Range at the Point of sale. This will most Definitely speed up the Consumer acceptance of BEV’s.
And the same applies to solar and whole house heat pumps. Do we think its a coincidence that Ford raised its truck prices ALREADY by UHUM $7k. And ya wonder why they go out of business from shady business practices…nothing but greed.
Why does there have to be a tax credit at all for EV’s? I thought they were awesome and their reputations would sell themselves? By the way Manchin and Schumer are complete trash.
@USA 1
Why does our Government subsidize Big Oil more than anything else in the World?
I thought Gasoline was Awesome. Makes no sense Huh?
True maybe…but PLEASE STOP GIVING BIG OIL tax breaks since they have been in business 100+years as well as sending our military spending billions protecting the waterways of the middle east and elsewhere. So where would you like to ditch it all!
Good God, please stop with the corporate welfare. How long do these people plan to prop up EVs? Forever? These incentives were put in place to help EVs get started and become viable. That goal is accomplished as they’re now widely available and Tesla is wildly successful.
I do not support taxing everyone and then giving that tax money to the few with the resources and desire to buy an electric car. Essentially people that cannot afford a $65,000+ electric car are subsidizing them for those than can. That’s flat-out wrong and I don’t believe most Americans, if asked, support that.
You realize your cell phone was a brick size and cost $2k before it got down to the prices it is today. The question is how greedy the companies will be not to lower the prices with less parts and less labor. Oh and please stop with the tax breaks for the 100+ year old oil industry and stop sending our military to protect areas of the world where oil flows! Then we are all on equal footing.
It’s not too restrictive, it’s a scam! There shouldn’t be any incentives. Why should I help pay for anyone else’s EV?! If they’re such a good idea why must the government pay people to buy them??
@Carl
With that Logic, why should I pay for Big Oil?
They make plenty of money but they’re the most Subsidized thing in the entire World. Weird huh
Zero sympathy for EV pushing domestic automaker scum. Guess you better find those batteries in the US fast, or keep making ICE.
All this is just more evidence of how life becomes increasingly complicated when government thinks they know what’s best and continually intrudes into what should be individual decisions, for people and companies. Ever hear of unintended consequences? Why does it seem government always attracts the Gladys Kravitz’s of the world.?
Don’t worry there are enough Endora’s too counter.