The United States government has introduced multiple initiatives this year intended to promote production of EVs, and the mining of the materials needed to produce them, in the United States. These efforts include the Inflation Reduction Act (IRA), grants distributed to manufacturing and processing companies, and the American Battery Materials Initiative. Now, as a result of these initiatives, GM electric vehicles won’t be eligible for the full EV tax credit for a few years.
According to a report by Electrek, GM doesn’t yet have the capability to meet the full $7,500 tax credit that’s going into effect on January 1st, 2023. As of that date, GM EVs will only qualify for half the credit. GM is currently working to source battery minerals for the Chevy Bolt EV and Chevy Bolt EUV, as well as Ultium batteries, domestically. As the Detroit-based automaker is planning to launch new 30 electric vehicles by 2030, it must take advantage of the tax credit in order to reach more customers.
“We think, out of the gate, we’re going to be eligible for the $3,750, and we’ll ramp to have full qualification in the next two to three years, getting up to the $7,500.” said GM CEO Mary Barra.
As a quick refresher, the Inflation Reduction Act provides up to $7,500 in tax credit for eligible vehicles. However, aside from the purchase price, two conditions must be met if the EV is to qualify for the full credit:
- Minerals – Beginning in 2023, 40 percent or more of the critical minerals used in batteries must be manufactured or assembled in North America. This percentage rises by 10 percent every following year.
- Components – Beginning in 2023, 50 percent or more of the value of the EVs battery components must be manufactured or assembled in North America. This percentage rises by 10 percent every following year.
It’s important to note that if only one of these requirements is met, the EV will receive half of the $7,500 credit, as will be the case of GM for the time being.