Automakers say 70% of EV models don’t qualify for tax credit under Senate bill

Buyers of a majority of electric vehicle models would not qualify for a $7,500 tax credit under a Democratic proposal in the US Senate.

That’s according to a group of major automakers.

Automakers have been personally concerned about the proposal’s requirements for vehicle batteries and critical mineral content to come from the United States.

The July 27 proposal by Senators Chuck Schumer and Joe Manchin would render 70% of U.S. electric, plug-in hybrid and fuel cell vehicles ineligible when they pass, according to John Bozzella, head of the Automotive Innovation Alliance.

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Sen. Joe Manchin, Democrat of West Virginia and Senate Majority Leader Chuck Schumer (D-NY). (Kent Nishimura/Los Angeles Times via Getty Images/Getty Images)

The group represents among others General Motors, Toyota Motor and Ford Motor.

“None would be eligible for full credit when additional sourcing requirements come into effect,” he said.

Automakers want significant changes to the proposal, which is part of a bigger bill of drug prices, energy and taxes.

GM headquarters in Detroit

The new GM logo is seen on the facade of the General Motors headquarters in Detroit, Michigan, March 16, 2021. (REUTERS/Rebecca Cook/Reuters Photos)

Without the tax credit, vehicles become more expensive for American consumers.

President Biden aims for half of all new vehicles sold to be electric or plug-in hybrid models by 2030.

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Analysis by the Congressional Budget Office on Wednesday suggested that only 11,000 new electric vehicles would use the credit in 2023.

Photo of a Walmart charging station

Walmart and Electrify America announced that more than 120 charging stations have been added to stores in 34 states. (Walmart)

Manchin and Schumer’s offices did not immediately comment. The Senate could vote on the bill as early as Saturday.

The bill includes increasing requirements for the percentage of battery components sourced from North America based on value. After 2023, it would ban batteries with Chinese components.

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The group would prefer to see a phased introduction of battery components, critical minerals and final assembly requirements.

Reuters contributed to this report.

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