People who want to buy an electric vehicle could get a bigger-than-expected tax credit come Jan. 1 because of a delay by the Treasury Department in drawing up rules for the tax breaks.
The department said late Monday it won't finish the rules that govern where battery minerals and parts have to be sourced until sometime in March.
Experts say most automakers won’t be able to comply with requirements that the battery components come from North America. For instance, General Motors already has said that it expects its EVs to get only half the tax credit, or $3,750, until at least 2025.“I imagine there will be a rush,” on EV dealers to get the extra savings, said Sam Abuelsamid, principal e-mobility analyst with Guidehouse Research.
“It should allow some consumers to get an EV a little bit cheaper than they might have otherwise,” said Chris Harto, a senior policy analyst on transportation and energy for Consumer Reports magazine. Automakers have criticized the battery sourcing and assembly requirements as complex, hard to trace and unrealistic in the short term, with no EV model sold in the U.S. likely able to qualify right away for the full $7,500 tax credit. Beginning next year, the new law requires batteries to be made in the U.S., Canada or Mexico, with 40% of battery minerals coming from North America.
The new law continues to require that EVs be assembled in North America, which took effect when Presidentsigned the measure in August. Still taking effect on Jan. 1 are new caps that EV sedans must cost $55,000 or less, or under $80,000 for pickup trucks, SUVs and vans. A car buyer must have income of $150,000 or less if single, or $300,000 if filing jointly.
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