EV Tax Credit Guidance Pushed Back To March 20236
The U.S. Treasury has just delayed EV tax credit guidance, which includes requirements on the origin of minerals and battery components, until March 2023.
Coming from a report by Automotive News, this delay could potentially mean that GM EVs currently eligible for the EV tax credit could benefit from the full $7,500 credit until the updated guidance is released in March 2023. Under the Inflation Reduction Act, the U.S. Treasury was supposed to release revised guidance by the end of December 2022. Per previous GM Authority coverage in early November 2022, house lawmakers were pushing to delay the proposed stipulations on manufacturing and material sourcing.
“As much as automakers and policymakers would like this transition to happen faster, increasing access to critical raw materials, expanding manufacturing capacity and broadening our domestic supply chains will not happen overnight,” said the Alliance for Automotive Innovation, which represents a majority of major automakers in the U.S.
As a reminder, the recent Inflation Reduction Act put restrictions on the $7,500 EV tax credit in an attempt to encourage U.S production of battery packs for electric vehicles. Under the original timeframe, EVs must meet two conditions in order 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. At this time, GM EVs only qualify for half of the tax credit. GM is currently working to domestically source battery minerals for Ultium batteries, and possibly for the Chevy Bolt EV and Chevy Bolt EUV battery packs as well.
Subscribe to GM Authority for more GM EV news, GM-related politics news and around-the-clock GM news coverage.
- Sweepstakes Of The Month: Win a 2023 Corvette Z06 Convertible. Details here.
Trey H: As the writer of this article, I’m asking if you can give or find some clarity on this. I’m wanting to go back to an EV due to my ideal driving situation for an EV, so I placed an order for a 2023 Chevy Bolt EV (Not EUV). The car should be here after January 1st and before the end of February.
I’m not understanding this in the article. We know the Bolt (any GM EV) won’t be eligible for any federal tax credits till after Jan. 1st. Will the Bolt have no tax incentive now till after March 2023 or will it be half the $7,500 or will it get the full $7,500? Thanks.
The dollar values based on the battery sourcing requirements don’t go into effect until the treasury publishes the guidelines. The per manufacturer caps are eliminated starting Jan 1st. So after Jan 1st, the Bolt should again qualify for the EV tax credit due to the lifting of the per mfg cap. The amount it qualifies for after Jan 1st and before the treasury publishes the sourcing requirement guidelines, should be based on the section’s current rules and calculations based on battery sizes and limits. which for the bolt, should be $7500. After they publish the rules (estimated sometime in March), it may only qualify for 1/2 the credit.
rEVolutionary: Thank you for that. Appreciate it. I did find/read another article about this last night and it said the same basic thing you just said. Looks like I may have lucked out and ordered my Bolt at the right time! The dealer just told me it’s going to arrive on or before January 15th.
Lucky you Dan. There is no confirmed date here in Montreal. I guess GM is sending more Bolts to the US than to Canada. Very strange because the EV haters on here say that nobody wants them.
Please explain on what basis Bolts will be eligible for $3750 tax credit after battery sourcing rules are implemented? What makes them eligible at all, then?