GM's EVs Will Qualify For Full $7,500 Tax Credit Within Three Years
On an earnings call, it sounds like GM’s EVs won’t qualify for the full EV tax credit out of the gate.
A few days ago, on an earnings call, GM’s CEO Mary Barra responded to a question; Will GM’s EVs be eligible for the full plug-in vehicle tax credit? And, Barra decisively said right out of the gate, that its EVs will be eligible for half of the credit, or $3,750. True, not the full $7,500, but also more than the brand is eligible for, which is nothing, due to the old 200,000 units sold eligibility cap.
When the Inflation Reduction Act officially passed in mid-August, it added new caveats to the plug-in tax credit. Firstly, it removed the 200,000 units sold cap but added a clause that only vehicles made in North America would be eligible. The actual $7,500 criteria were split in half, $3,750 coming from where the battery is assembled; at least 50% of the battery components must be made in North America (adding 10% every year). The other $3,750 comes from the source of the battery’s minerals, at least 40% will need to be processed and refined either in the US or one of its free trade partners. Like the battery components clause, the mineral clause will also add 10% each year until it hits 100%.
It seems like one of the two criteria is GM’s biggest hurdle, but Barra is on it. She says the brand is working to secure contracts and ramp up production so its vehicles qualify for the full tax credit.
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Kevin has been obsessed with cars ever since he could talk. He even learned to read partially by learning and reading the makes and models on the back of cars, only fueling his obsession. Today, he is an automotive journalist and member of the Automotive Press Association. He is well-versed in electrification, hybrid cars, and vehicle maintenance.
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