On Thursday, the US Treasury Department announced that starting in January, electric vehicles rented by consumers may be eligible for a $7,500 commercial clean car tax credit. Probably the most interesting, like Reuters reportThe announcement includes electric vehicles built outside of North America.
That’s good news for automakers such as hyundai felt that the Inflation Reduction Act treated them unfairly by ending their ability to qualify for tax credits, especially given the lack of time to build qualified EV plants. Definitely from Hyundai Not the only automaker to complain, but it was one of the noisiest. But at least for now, it looks like a deal has been reached that will give struggling automakers some of the things they want.
Importantly, the commercial EV tax credit does not have the same battery sourcing requirements as the consumer credit made under an IRA. Senator Joe Manchin has previously encouraged the Treasury Department not to allow this alternative because automakers would see it as “a way to bypass stringent sourcing requirements.”
$3,750 of the total available consumption tax credit requires that at least 40 percent of the “value of the key minerals in the battery have been extracted or processed in the United States or a country with a free trade agreement.” with the United States or recycled in North America, a percentage of claims increases every year.” In its statement on Thursday, the Treasury also said it would define the free trade agreement requirement more broadly than you might expect.
The initial list of countries currently eligible includes Australia, Bahrain, Canada, Chile, Colombia, Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras, Israel, Jordan, South Korea, Mexico, Morocco, Nicaragua, Oman, Panama, Peru and Singapore. But according to Reutersit is possible that more countries will be added to the list if they negotiate agreements in the next few months.
