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.”