U.S. EV tax credit proposal adds tougher sourcing limits for critical minerals, batteries

WASHINGTON — A Senate proposal released Wednesday would extend the current $7,500 tax credit for consumers buying new electric vehicles but add increasingly stringent critical mineral and battery sourcing requirements for automakers.

Final assembly of the vehicle must occur within North America — a provision that would apply immediately after the bill is enacted. Mazda currently offers only one fully electric vehicle, the MX-30 — a 100-mile-range crossover being rolled out in limited volume to customers in California — compared with competitors such as GM, Ford Motor Co. and Tesla. The tax credit would apply to battery-electric, plug-in hybrid and fuel cell vehicles that meet the various requirements.

The proposal also creates a $4,000 tax credit for consumers buying certain used EVs and a credit for certain commercial vehicles. The tax credits would be applied at the point of sale and expire after Dec. 31, 2032. By 2030, the auto industry will have invested half a trillion dollars in electrification, according to the Alliance for Automotive Innovation, which represents most major automakers in the U.S.

"The impact of the battery materials and components per centage requirements is difficult to assess," McDonald said of the new proposal."But with GM, Ford and other OEMs building battery cell plants in the U.S., these OEMs were clearly involved in … helping set the requirements and percentages." Manchin — a conservative Democrat from coal-producing West Virginia — reportedly said earlier this month that he wouldn't support an economic package that includes climate spending or tax increases for corporations and the wealthy because of rising inflation.

Source: Loan Digest (loandigest.net)

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