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EVs, Sourcing and the Inflation Reduction Act, Part 2
EVs, Sourcing and the Inflation Reduction Act, Part 2
By Don Southerton
As a follow-up to my April 11, 2023 Newsletter, I am sharing those vehicles qualifying for the full EV $7,500 credit as well as those for a partial rebate.
I pointed out before the criteria would eliminate many (most) EVs from a rebate as they are not made or assembled in North America.
Although some EVs may qualify for partial rebates, the batteries must be assembled or produced in the U.S., and 40% percent of the critical minerals must be sourced in America or with a free trade partner. For the latter, the percentage will increase to 50% in 2024, 60% in 2025, 70% in 2026, and 80% after 2026.
Specifically, under the Inflation Reduction Act, vehicles that use batteries that contain (i) any “applicable critical minerals” that were extracted, processed, or recycled by an FEOC or (ii) any component manufactured or assembled by an FEOC would be ineligible for the $7,500 Section 30D consumer tax credit (Sec. 13401(e)(7)) starting after 2023.
This said, and according to the IRS’ most recent April decision… we now know…
To qualify, a vehicle must:
• Have a battery capacity of at least 7-kilowatt hours.
• Have a gross vehicle weight…
