OOF: EVs Take Another Major Hit with Big Change to Tax Credit

Another day, another bad bit of bad news for the electric vehicles that certain people within the government (looking at you, Mayor Pete) seem intent on foisting upon the American people.

Specifically, it appears that a whopping 70 percent of electric vehicles currently on the market would be ineligible for the $7500 tax credit under the current Democrat plans in the Inflation Reduction Act, which is supposedly meant to help the “green” initiatives that the EV industry purports EVs are.

Writing about that was John Bozzella, the head of the Alliance for Automotive Innovation. He freaked out about the policy and called attention to how much it would hurt the EV industry in an article that made it pretty clear how uninterested Americans are in EVs when the nearly eight-thousand dollar subsidy isn’t in play.

Bozzella began the panic part of his article by pointing out how few vehicles would qualify for the credit once the new assembly requirements come into play

The EV tax credit (aka the Clean Vehicle Credit) in the bill is an effective tool to help reduce the upfront cost of an EV for the millions of Americans in the market for a new car or truck. Increasing EV sales in the near term will support the additional investments required to quickly transform the nation’s industrial base.

But… as currently written, the material, component and assembly requirements in the Clean Vehicle Credit will immediately reduce (by a lot) the number of qualifying electric vehicles available to consumers for purchase with the tax credit.

Here’s what I mean: there are 72 EV models currently available for purchase in the United States including battery, plug-in hybrid and fuel cell electric vehicles. Seventy percent of those EVs would immediately become ineligible when the bill passes and none would qualify for the full credit when additional sourcing requirements go into effect. Zero.

And what are those requirements that Bozzella is freaking out about? More components have to be made in America and batteries can’t be sourced from China after a certain date; it’s one of the actually good parts of the Inflation Reduction Act, as it would at least pull some manufacturing away from Red China.

To qualify for the credit, the manufacturers just need to make the parts and mine the materials in North America. Why should we subsidize Red China’s mining sector?

But Bozzella didn’t want to comment on how Americans might get a few more jobs out of it, or that it would put EVs and combustion engines on a fair footing. Rather, he noted that EVs are going to take a massive hit without the subsidy, saying:

Put another way, Americans who would otherwise receive the credit today (say, the family test driving a car this weekend and on the fence about whether to make the switch to an EV) will no longer be able to take advantage of this financial incentive to purchase an EV. The $7500 credit might exist on paper, but no vehicles will qualify for this purchase incentive over the next few years. That’s going to be a major setback to our collective target of 40-50 percent electric vehicle sales by 2030.

Manchin, for his part, was uninterested in changing the bill to calm the freaking out “experts” that want to keep manufacturing parts for EVs in China, saying:

“Tell (automakers) to get aggressive and make sure that we’re extracting in North America, we’re processing in North America and we put a line on China.”

So at least there are some good parts of a generally horrific bill. Maybe a few jobs will be brought back to America’s manufacturing and mining sectors thanks to the new requirements and Manchin’s intransigence.

By: Gen Z Conservative, editor of GenZConservative.com. Follow me on Facebook and Subscribe to My Email List